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The damning new BCC report - to be presented to the e-minister Douglas Alexander on 19 November - also calls for the IR35 tax regime to be abolished, and for the development of a more e-commerce friendly tax regime.
The report recommends that broad generalised targets should be replaced by efforts to improve public confidence in e-commerce, more investment in tackling cybercrime and faster roll-out of broadband services.
Using the latest data from the Department of Trade and Industry's Business in the Information Age: International Benchmarking Study 2001, the report shows that only 540,000 small firms are trading online. The data also indicates that business take-up of online commerce has reached a plateau, and in some sectors has actually fallen.
"British companies are not in the business of fulfilling aspirational targets set by any government. They are, however, alert to the competitive benefits of trading online and where these exist, businesses will drive and will respond," said Sally Low, e-business adviser at the BCC.
Low went on to criticise the government's target for e-business. "The role of government should be one of enabling business in the most efficient and effective manner, and not [preoccupying itself] with assessing and measuring targets," she said.
Key problems in the uptake of e-business, the report claims, include inconsistent training by Government-accredited advisers; lack of confidence in the safety of online trading; lack of progress in developing broadband access for business and growing concern that the UK's regulatory e-business framework is uncompetitive.
The BCC report recommends scrapping the IR35 regulation in favour of working more closely with businesses to define tax obligations for self-employed contractors. It also wants an indefinite extension of the current 100% capital allowance for small firms' investment in IT hardware and software