Amazon announced in August that you will be paying the Digital Services Tax levied on Amazon by the UK Government. The Amazon fee changes mean that your invoice will be 2% more expensive from today, the 1st of September.
The Digital Services Tax is levied on the revenues of search engines, social media services and online marketplaces which derive value from UK users. It’s a response to businesses which are domiciled overseas and operate paying less that what is perceived as their fair share of tax based on their revenue generated from their UK operations. The Government describes this as a misalignment between the place where profits are taxed and the place where value is created.
Amazon Fee Changes Examples“Under the current international tax framework, the value businesses derive from user participation is not taken into account when allocating the profits of business between different countries. This measure will ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services.”
– HM Revenue & Customs
The increase of 2% will apply on referral fees, Fulfilment by Amazon (FBA) fees, and monthly FBA storage fees by 2% for items sold in the UK.
Additionally, starting on the 15th of September 2020, Multi-Channel Fulfilment (MCF) fees will increase by 2% for items sold in the UK.
NB this is a 2% increase on the fees, not an extra 2% of your item’s selling price. It basically means that your total invoice will be 2% higher than it would previously have been.
For example, on an item for which the referral fee on Amazon UK is currently 15.0%, you will pay a fee of 15.3%, and for a parcel with a current UK rate of £2.27 (standard parcel ≤0.5kg), you will pay a fee of £2.32 starting from today, the 1st of September.
More info on today’s Amazon Fee Changes
More information about these Amazon Fee Changes, including fee definitions, examples, and frequently asked questions are available on the Amazon help pages in Seller Central
4 Responses
This is HMRC’s attempt to make amazon pay their fair share of taxes in the UK.
How about we get some real people in these government roles ! Its pathetic.
Stupidity at work in plain sight. Amazon are not paying any more to the Government, the costs have just been dumped on the users. Another stupid Government tax increase on us all.