EU Legislation proposals could cost online retailers an extra £8.8bn in delivery charges per year and threatens to derail the growth of e-commerce.

Trade body IMRG warns the extra costs – which amount to 4% of the total European e-commerce market – could force many smaller retailers out of business.

Draft amendments to the Consumer Rights Directive passed last week will require retailers to pay for return shipping costs for unwanted items over €40 (£34). It will also force retailers to deliver to all EU countries, regardless of whether they are prepared to trade there.

IMRG chief executive James Roper said: “These new amendments are some of the most disastrous for the online industry yet.

“As well as being unnecessary they would inevitably lead to significant price increases being forced onto already hard-pressed consumers, pushing up prices across all retail channels, and disadvantaging SMEs to the point where many would be forced to cease trading online altogether.”