Freeserve has been lobbying the Customs & Excise department to create a level tax playing field since July, after Merrill Lynch released a report showing that AOL could avoid accounting for VAT in the UK because it is based overseas.
The analyst firm said that the savings could amount to as much as Pounds 30m per year.
Although Customs & Excise has completed a review of the AOL situation and a conclusion was expected in September, no decision has yet been published.
This week in a letter to Paul Boateng, the Customs minister, Freeserve said: ‘In the letter we point out that in the event the position is allowed to drag on much further, we will have no option but to pursue a remedy against the UK government before the European Commission, arguing that the government’s failure to act puts it outside the scope of current community law.’
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