UK Amazon Sellers Will Pay 2% More in Fees From September

Amazon sign on fulfillment center

In perhaps an un-surprising move Amazon has announced that for UK sellers on the Amazon platform they will be increasing Referral fees, Fulfillment by Amazon (FBA) fees, monthly FBA storage fees and Multichannel Fulfillment (MCF) fees by 2%.

This is in response to the UK government introducing a Digital Services Tax (DST) back in April 2020.

Amazon was quick to point out that since April, they have been covering the tax implications and that the fee increases on the Amazon marketplace would be coming into play from the 1st September.

They also wanted to give sellers piece of mind that they would not be being charged retrospectively for the DST and that the fees will only be increasing from the 1st September.

The main criticism of this move amongst sellers and consumers however was the nature in which the DST was introduced in the first place.

A statement from HMRC regarding the introduction of the Digital Sales Tax included:

“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.” – HMRC

This implies that the whole point of the DST was to make sure large multi-national businesses are paying a contribution in tax to support public services.

The reality of the situation is Amazon have done this for just 4 months before now passing this tax onto their customers and ultimately consumers as sellers will likely be forced to increase their prices too.

What are your thoughts on this? A shrewd business move from Amazon, or another way in which small sellers and consumers are being taxed once again?

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