Amazon is imposing “millions of pounds of extra costs” on UK sellers raising fees for a raft of services by two per cent.
Amazon informed its UK sellers that its will be passing the costs of the new Digital Services Tax, which the government imposed on April 1, directly to them.
The Digital Services Tax was set up to ensure search engines, social media services and online marketplaces which derive value from UK users pay their fair share of taxes, adding a two per cent levy on all revenues with hopes of raising £500 million a year.
Instead Amazon is simply shifting the bill to its sellers and will effectively not pay a penny of this new tax, a move which has been panned across the industry.
“The tax is aimed at the profits of multinationals with large revenues,” the Federation of Small Businesses’ chairman Mike Cherry said.
“Passing the tax on to their small business customers will hurt them at the worst possible time.”
Amazon will impose a two per cent cost increase on referral fees, fulfilment by Amazon fees, monthly storage fees and multi-channel fulfilment fees from September 1 “to reflect this additional cost”.
It added in a note to sellers: “While the legislation was being passed, and as we continued our discussions with the government to encourage them to take an approach that would not impact our selling partners, we absorbed this increase.”
The government has also proposed an additional “Amazon Tax” which would impose a similar levy on all online sales taxes.
Concerns have been raised that Amazon would employ a similar tactic should this be imposed, which could end up seeing sellers face a four per cent cost rise.