Amazon are emailing their merchants today to gather their views in a Voice of Small Business Survey on the Government’s proposals to introduce a new Online Sales Tax (OST). If implemented, the new tax will be payable by all retailers (including sellers) on the total value of their online sales in the UK. In the Government’s proposals, one suggested model is to introduce an OST levied at a rate of 1-2%.
We’d encourage you to compete the Voice of Small Business Survey if you receive it. All responses will be treated in confidence, no individual third-party sellers will be identified and only aggregate data, for example in relation to specific product categories or industries, or on third-party sellers as a distinct group from Amazon, will be shared.
OST is particularly troublesome as, like VAT, it’s not profits based but a tax on turnover. Online might be popular with shoppers but that’s often because prices are keen and in the face of competition small retailers may operate on fine margins. Take your annual turnover last year and consider how much 1% or 2% is – that’s how much you’ll lose if OST becomes a reality.
There are many blurred areas that also need addressing, for instance buy online collect in store – does that count as an online reservation but instore sale or is it an online sale? What about app purchases when in a store – for instance any regular ‘spooner’ will have used the Wetherspoons app (an online purchase) to order a round of drinks at their table (definitely in store consumption!) to avoid queue at the bar.
Amazon’s Voice of Small Business Survey should only take 3 minutes to complete. Your input will help them better understand your needs on these proposals and make representations on your behalf.
For more information, the Government’s consultation document on the OST is available on gov.uk.
