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Amazon is accused of ‘opting out’ of paying fair taxes

Amazon has been accused of ‘opting out’ of the newly-imposed UK digital services tax after it announced plans to hit small businesses that sell items on its website with higher fees.  

The multinational giant, which is valued at $1.5 trillion, has told businesses in the UK that it will increase its referral fees, fulfilment by Amazon fees, monthly FBA Storage fees and multichannel fulfilment fees by two per cent from September.

The internet shopping giant, which made a £4 billion profit in the second quarter alone, said the decision was prompted by the UK’s two per cent digital sales tax, which came into force on April 1.

Following their announcement, Lord Leigh of Hurley, Conservative peer and party treasurer, said the company was constantly in a ‘fight against good behaviour.’ 

Amazon has come under fire after it announced plans to hit small businesses that sell items on its website. (Stock image)

He told The Times: ‘Amazon are further engendering the risk that they exhibit monopolistic behaviour. And that will have consequences. They constantly fight against good behaviour.’

Meanwhile Darren Jones, chairman of the business, energy and industrial strategy select committee, told the paper: ‘Local high street retailers don’t get to opt out of VAT or business rates. Amazon shouldn’t be able to opt out of fair taxes either.’ 

The company, which was founded in 1994 by entrepreneur Jeff Bezos, currently charges those who wish to sell items on their website a 15 per cent referral fee on every sale.

However its latest move has angered sellers who argued the plans would see small businesses absorb the new digital tax in the UK.

Sharing their frustrations on an Amazon sellers forum, one user wrote: ‘Yep – we all get properly shafted yet again. It’s not a coincidence that our Jeff is wealthiest man on planet Earth. 

‘The UK government were supposed to be implementing this additional tax to reflect the disparity between where profits are taxed versus where the value is created. (FAIL). Bottom line is, we all end up paying 2 per cent more to Amazon to cover it on their behalf.’

While another frustrated seller wrote: ‘This is Amazon giving the finger to the UK government.’ 

Another person added: ‘The customer will eventually pay the tax, wait and see!’

Elsewhere, one seller wrote: ‘They are bleeding us dry. I am seriously considering switching some of my faster moving lines onto eBay.’

The tech giant, which is valued at $1.5 trillion, said the decision was prompted by the UK's two per cent digital sales tax, which came into force on April 1. (Stock image)

The tech giant, which is valued at $1.5 trillion, said the decision was prompted by the UK’s two per cent digital sales tax, which came into force on April 1. (Stock image)

The internet shopping giant told its seller that it would be increasing its referral fees, fulfilment by Amazon fees, monthly FBA Storage fees and multichannel fulfilment fees by two percent from September in a message on their website

The internet shopping giant told its seller that it would be increasing its referral fees, fulfilment by Amazon fees, monthly FBA Storage fees and multichannel fulfilment fees by two percent from September in a message on their website

Mike Cherry, chairman of the Federation of Small Businesses, 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.’

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 rules would be consistent across countries and clearer and fairer for businesses. 

‘As we’ve previously indicated, the way that the Government has designed the Digital Services Tax will directly impact the businesses that use our services.’      

The move by Amazon comes after its former UK boss, Doug Gurr, tried to warn the Government off the tax, saying it would be passed on.

In a note to UK sellers, Amazon said: ‘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.

‘Now the legislation has passed, we will be increasing referral fees, fulfilment by Amazon fees, monthly storage fees and multi-channel fulfilment fees by 2 per cent to reflect this additional cost.’

Amazon introduced similar changes in France last year.

The Treasury has said it hopes to raise £500million a year from the digital sales tax.

In April, technology firms including Facebook, Google, Apple and Amazon pleaded that they should not have to pay a newly-imposed UK digital services tax.

Trade body TechUK, which represents hundreds of technology companies in Britain including the four giants, said the Government should ‘look again’ at the new levy.

It also asked for ‘a bit more breathing space’ by liabilities being delayed for a year. 

The two per cent tax came into force in April as the Government tried to clamp down on profits and money being moved to countries with lower tax levels.

It will affect at least 30 firms with more than £500million of global revenues, but TechUK said it feared more companies will be caught by the tax than intended.

Read more at DailyMail.co.uk


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