Homestyle is challenging the taxman to make 'an offer we can't refuse' to resolve the£27 million dispute over VAT treatment of furniture warranties.
Chief executive Michael Rosenblatt said he was willing to settle for a bill 'considerably less than£15 million' to resolve the matter and avoid lengthy legal process.
Retail peers Courts and MFI, who also received hefty VAT bills, have both lodged appeals.
Their position has been strengthened by recent test cases.
Rosenblatt said: 'We have a strong case. The issue is whether they can tempt us to settle.'