Amazon will not have to pay the government’s digital services tax, HMRC has revealed. The news comes after ministers claimed the new policy, which was unveiled in April, would force “global giants” operating in the UK to “pay their fair share towards supporting our public services”. Amazon will not have to pay the tax on goods it sells directly to consumers, but will be charged the 2% levy on revenues it receives from small traders who pay to use its online marketplace. The retail giant has already confirmed it will pass on this additional cost to third-party sellers – a move which will effectively give the retail giant a competitive price advantage over small traders on its platform.
Andrew Goodacre, chief executive of the British Independent Retailers Association, is among business leaders to have criticised the digital services tax. “All it has done is resulted in small sellers paying more and making less while Amazon gains further competitive advantage,” he said. Amazon paid just £14.4m in corporation tax in the UK last year, despite racking up annual sales of £13.7bn. The online retail giant has continued to express its support for a global agreement on digital taxation “at OECD level, rather than unilateral taxes” – arguing that such a tax would be consistent across countries and “clearer and fairer” for businesses. However, efforts to reach an international agreement collapsed last year after the US withdrew from negotiations.
