Amazon to hike sellers' fees as it passes on tech tax

Hannah Boland
·2-min read
Amazon - John Keeble/Getty Images
Amazon - John Keeble/Getty Images

Amazon has said it is hiking fees for those who sell items via its website next month as it passes on the cost of the UK's tech tax.

In a notice to sellers posted on its site today, Amazon said it had absorbed the cost of the digital services tax since it was introduced in spring, whilst it was continuing discussions with the Government "to encourage them to take an approach that would not impact our selling partners".

However, now that the tax had been legislated, Amazon said it would be increasing referral fees, storage fees and fulfillment fees by 2pc in the UK to reflect this additional cost.

The move is set to hit those sellers who sign up to "Fulfillment by Amazon", and send their goods to Amazon to store, ship and handle returns, the hardest.

It follows a similar step in France, when its own digital services tax was adopted.

UK's ‘tech tax’ | Key facts
UK's ‘tech tax’ | Key facts

Amazon said sellers would not be charged retrospectively, but that, from September 1, UK fees would increase. Payments under that tax are not due until next year. 

The company had warned smaller businesses would be hit by the new tax before it was formally introduced, with UK boss Doug Gurr telling the Financial Times earlier this year: “If you are not careful in the design, these taxes can actually hit all of the small businesses that use our services.

"The majority of sales on our marketplace are independent businesses. If that tax is passed on to them, that is quite a significant hit.”

Amazon had not been alone in piling pressure on countries not to introduce unilateral taxes, and the White House warned of retaliation should different states proceed with their own tax. 

It kicked off investigations into the digital services taxes adopted or being considered by countries including France, Britain and India. Reports suggest the White House could soon announce new tariffs against France. 

Countries have decided to introduce their own taxes, after talks at an OECD level over digital taxation ground to a halt. In June, the US called a halt to the talks citing a lack of progress.