Freeserve fears its rival AOL will get an unfair tax break because it is based in another country.
The ISP has written to the government calling on it not to bow to pressure from AOL over tax liability.
In the report, the analyst firm commented that AOL could save up to £30m per year in tax because it is not based in the UK.
Customs & Excise has undertaken a review of the AOL situation and the findings were expected in September, but as yet no decision has been published.
Freeserve has been lobbying the Customs & Excise department to create a fair tax system since the summer, following a report from Merrill Lynch which shows that AOL could avoid accounting for VAT in the UK because it is based abroad.
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