MANY businesses trading over the internet could be paying more tax than they should because of the tangled web of tax tariffs between different countries.

Some firms could end up paying twice the amount of tax necessary.

"Taxation of e-commerce can be extremely complicated and can depend on where the business is located," said David Macey, partner at the Bournemouth office of chartered accountants Saffery Champness.

Companies "need to be aware of the tax consequences of the transactions they carry out, and have an effective tax administration to keep compliance costs to a minimum.

"They also need to be aware of the important tax incentives which are available to small and medium enterprises to encourage innovation."

Increasing numbers of businesses are seeking professional advice on e-commerce ventures following the highly-publicised failures of some high profile websites.

Mr Macey said: "Almost all businesses expect to increase their e-commerce presence to benefit from the advantages that an effective website provides in terms of marketing information around the clock throughout the year to a global audience.

"But many are still on a learning curve for internet trading and they will have to keep pace with rapidly expanding technology to stay ahead of the game, otherwise they risk losing valuable market share to their competitors."