A major internet company founded in Bradford is campaigning against unfair competition created by a loophole in European tax laws.

Gameplay.com has enlisted the help of Yorkshire and Humber Euro MP David Bowe, who is pressing for action.

The video games and DVD retailer, which was founded by Bradford man Dylan Wilk nine years ago, is threatened by rivals based outside the European union.

They can sell the same products on the internet free from VAT provided they cost less than £18.

The MEP has raised the loophole in the European Parliament with the commissioner responsible for the internal market and taxation, Frits Bolkestein.

Mr Bowe said: "It is nonsensical that the effect of the rules is that EY-based companies are placed at a potentially serious disadvantage because, while they have to pay VAT applicable in their own countries, the rules allow competitors to sell free of any tax burden."

Gameplay was floated by Mr Wilk in 1999, immediately making the former Bradford Grammar pupil a millionaire. It now employs more than 30 people in Leeds.

The company is faced with rivals in the Channel Islands who do not have to pay the UK VAT rate of 17.5 per cent.