Amazon hits small sellers with fee rise as new ‘tech tax’ comes into force

Amazon hits small sellers with fee rise as new ‘tech tax’ comes into force

Next month Amazon will raise the price British firms pay to sell on its website by two percent. It said the decision was taken to “reflect this additional cost” from the new digital sales tax, which came into effect on April 1. Yesterday, Federation of Small Businesses chairman, Mike Cherry, said: “Government and Amazon should work together to find a way to resolve this impasse and prevent millions of pounds of extra costs being imposed on the small firms who are only just starting to recover from the biggest crisis for generations.

“The tax is aimed at the profits of multinationals with large revenues. Passing the tax on to their small business customers will hurt them at the worst possible time.”

Former Conservative party treasurer Lord Leigh of Hurley said: “Amazon are further engendering the risk that they exhibit monopolistic behaviour. And that will have consequences. They constantly fight against good behaviour.”

Costs are mounting for thousands of British firms who sell their products through Amazon. They already pay referral, storage and delivery fees. One seller wrote on a forum that the company had “shafted” small businesses while another said it was a case of Amazon “giving the finger” to the Government.

In a bid to ward off the tax, the tech giant’s former UK boss Doug Gurr warned the Government that entrepreneurs would feel its impact.

Amazon said: “While legislation was being passed and 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.

“Now the legislation has passed, we will be increasing referral fees, fulfilment by Amazon fees, monthly storage fees and multichannel fulfilment fees by two per cent to reflect this additional cost. Like many others, we have encouraged the Government to pursue a global agreement on the taxation of the digital economy rather than unilateral taxes.”

A Treasury spokesman said: “We’ve been clear the [digital tax] will be removed once an appropriate global solution is in place – and we continue to work to reach that goal.”

Business has boomed for Amazon during lockdown. The Treasury hopes to rake in £500million a year from big tech with the digital tax.

Published at Fri, 07 Aug 2020 08:23:56 +0000