Next boss Simon Wolfson claims an online sales tax would be an “extremely backward step” that could wipe out many digital start-ups. His views come as retail bosses slam the proposed tax in a letter to the Government.

Wolfson has added his comments to the debate after some retailers called for a level playing field between online and bricks-and-mortar retailers on tax.

Wolfson said: “A lot of small, fast-growing online firms work on very thin profit margins. An extra tax burden might simply wipe them out.

“For a country that is at the forefront of the internet revolution it would be an extremely backward step.

“I don’t think we could realistically expect a reduction in rates on the back of it. It would only increase the overall tax burden and would ultimately be passed on to consumers in the form of higher prices,” he told the Daily Mail.

Lord Wolfson added that the motivation for calls for the new tax appeared to be “to stop internet retailers growing, rather than to help the high street” and dismissed this as a “protectionist argument”.

His calls came as the bosses of six big-name retailers called for an end to the argument for an online tax in a letter to the Chancellor.

Ocado chief executive Tim Steiner, Shop Direct’s Alex Baldock, Boden’s Julian Granville, N Brown chief executive Angela Spindler, Appliances Online’s John Roberts and co-founder Holly Tucker have all signed the letter.

It said: “An online tax would kill entrepreneurial spirit by making it harder for smaller online retailers to get started.”

The six retailers also called for a cut in business rates.

“Physical retailers rightly continue to call for lower business rates on their stores. But to simply shift the burden to online retailers by imposing a new tax is a nonsense that will be detrimental for consumers, jobs and investment,” the retailers added.