A licence to operate in the islands has been proposed

The Forum of Private Business is meeting HM Revenue and Customs as part of its war on retailers who sell goods tax-free over the internet.

Both Jersey and Guernsey are under mounting pressure from the UK treasury to stop retailers selling goods such as CDs and DVDs without VAT.

The British government is losing an estimated �80m-a-year because of this.

New licence

Under European law, retailers operating outside the EU can sell products valued at less than �18 to customers in member states without charging VAT.

Many UK businesses have taken advantage of the boom in internet shopping and are operating from Jersey.

Last month the States of Jersey's Economic Development Committee said it hoped new plans to introduce a licence would control the growth of internet mail order companies in the UK.

A licence would also be required by firms operating in the islands.