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Amazon hikes UK seller fees in response to digital services tax

Sian Kelly Last updated: August 11, 2020

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Online marketplace Amazon is to increase fees for UK sellers next month by 2%, in response to the introduction of the UK’s digital services tax (DST), in a move which is likely to increase costs for small businesses and traders who use the platform

The US company’s fee hike follows a similar decision last year after the introduction of a 3% DST in France, when sellers there saw their fees raised by the same amount.

In a communication with its sellers in the UK, Amazon said:

“Earlier this spring, the UK government introduced a digital services tax.

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 that the legislation has passed, we want to inform you that we will be increasing referral fees, fulfilment by Amazon (FBA) fees, monthly FBA storage fees and multi channel fulfilment (MCF) fees by 2% in the UK to reflect this additional cost.

We will not apply the increased charges retroactively, but starting 1 September 2020, the fee types listed above will increase."

The UK’s DST came into operation from 1 April 2020. It is a 2% tax on the revenues derived from UK users of social media platforms, search engines and online marketplaces and applies to revenue earned from that date.

Any business which provides a social media platform, search engine or online marketplace to UK users needs to register to pay if it has global revenues of more than £500m in a year and UK revenues of more than £25m in a year.

Source: https://www.accountancydaily.co/amazon-hikes-uk-seller-fees-response-digital-services-tax