Play.com will cease trading in March.
The company have announced it will no longer directly trade goods, though the website will remain open purely as a marketplace, similar to eBay and Amazon, allowing customers and independent retailers to sell goods through the site.
147 employees will lose their jobs at the Jersey facility, with another 67 going from its Cambridge and Bristol offices.
The Play.com business was hugely affected last year when it was ruled that the tax loopholes the site were taking advantage of should be closed. The Low Value Consignment Relief, which allowed Jersey-based businesses – such as Play – to sell items less than £15 into the UK without paying VAT, closed down in April 2012.