Amazon has been accused of dodging the newly imposed digital services tax in the UK after it announced plans to hit small businesses selling items on its website at a higher cost.
Valued at $ 1.5 trillion, the multinational giant has told companies in the UK that it will increase its referral fees, payment by Amazon fees, monthly FBA storage fees, and multichannel processing fees by two percent from September.
The internet retailer, which made a £ 4 billion profit in the second quarter alone, said the decision was motivated by the two percent UK digital sales tax, which came into effect on April 1.
After their announcement, Lord Leigh of Hurley, conservative peer and party treasurer, said the company was constantly “struggling for good behavior.”
Amazon came under fire after it announced plans to hit small businesses selling items on its website. (Stock image)
He told The times: ‘Amazon also runs the risk of showing monopolistic behavior. And that has consequences. They constantly fight good behavior. ‘
Meanwhile, Darren Jones, chairman of the corporate, energy and industrial strategy selection team, told the newspaper, “Local high street retailers should not waive VAT or corporate rates. Amazon also could not waive fair taxes. ‘
Founded in 1994 by entrepreneur Jeff Bezos, the company is currently charging fees for those looking to sell items on their website a 15 percent referral fee on every sale.
But the final move is outraged by sellers who claimed the plans would mean small businesses absorb the new digital tax in the UK.
A user sharing his frustrations on an Amazon seller forum wrote: “Yes – we are all well sanded again. It is no coincidence that our Jeff is the richest man in the world.
The UK government would introduce this additional tax to reflect the difference between where profit is taxed and where value is created. (FAILED). The bottom line is that we all end up paying 2 percent more to Amazon to cover it on their behalf. ‘
While another frustrated seller wrote, “This is Amazon giving the finger to the British government.”
Another person added, “The customer will pay the tax in the end, wait and see!”
Elsewhere, a salesman wrote, “They’re bleeding us out. I am seriously considering transferring some of my faster moving lines to eBay. ‘
Valued at $ 1.5 trillion, the technology giant said the decision was driven by the UK’s two percent digital sales tax, which went into effect April 1. (Stock image)
The Internet store giant told its seller that it would increase its referral, Amazon fee, monthly FBA storage, and multichannel processing fees by two percent from a post on their website from September
Mike Cherry, president of the Federation of Small Businesses, said, “The government and Amazon need to work together to find a way to overcome this deadlock and avoid paying millions of pounds of additional costs to the small businesses that have just are starting to recover from the biggest crisis in generations.
‘The tax is aimed at the profit of multinationals with large income. Passing the tax on to their small business customers will hurt them at the worst possible time. ‘
An Amazon spokesperson told MailOnline, “Like many others, we have encouraged the government to pursue a global agreement on the taxation of the digital economy at OECD level rather than unilateral taxes, so that the rules are consistent across all countries are clearer and fairer to companies. .
“As we mentioned earlier, the way the government has designed the tax on digital services will directly impact the companies that use our services.”
Amazon’s move comes after its former British boss, Doug Gurr, tried to warn the government about the tax, saying it would be passed.
In a letter to UK sellers, Amazon said: “While the legislation was passed, and as we continue our discussions with the government to encourage them to adopt an approach that would not affect our sales partners, we have caught this increase.
“Now that the legislation has been passed, we will increase the referral, Amazon fee, monthly storage, and multi-channel execution costs by 2 percent to reflect these additional costs.”
Amazon made similar changes in France last year.
The Treasury hopes to raise £ 500 million a year from digital sales tax.
In April, tech companies such as Facebook, Google, Apple and Amazon argued that they shouldn’t have to pay a newly imposed UK digital service tax.
Trade organization TechUK, which represents hundreds of technology companies across Britain, including the four giants, said the government should “review the new charge.”
It also required ‘a little more breathing space’ because the obligations were postponed for a year.
The two percent tax came into effect in April when the government attempted to curtail profits and money transferred to countries with lower tax levels.
It will hit at least 30 companies with more than £ 500m in worldwide revenues, but TechUK said it fears that more companies will be tax-hindered than intended.