THE UK Government is being urged to work with Amazon to tackle the scourge of online merchants been frozen out of their accounts by HMRC red tape.
The SNP have demanded ministers and the firm work together to come to a solution to problems and delays to VAT checks which have seen hundreds of small businesses selling goods on Amazon frozen out of their accounts and denied substantial sums.
HMRC requires that online retailers check that retailers are based in the UK so VAT can be applied.
But Amazon freezes the accounts of those under investigation, a process which can take weeks, leaving many denied the ability to withdraw money earned through sales.
Richard Thomson (above), the SNP’s business spokesperson, told The National that UK Government red tape was “slowing business down”.
He said: “Delays in the processing of these crucial checks are preventing many small businesses from being able to operate, and even pay tax and VAT.
“With a cost of living crisis and a recession raging, it’s important the UK Government and Amazon do everything it can to empower businesses from being able to trade normally – instead, this is an example of them slowing business down.
READ MORE: Scottish hotel dubbed 'absolute gem' named one of the most stylish on the planet
“The UK Government has a responsibility to support business and must work with Amazon to find a solution that will allow companies to continue to trade on Amazon while checks are undergone in the background.”
He said that action from ministers “could make the difference between small business owners being able to keep staff, pay bills, or even continue to exist”.
An Amazon spokesperson said: “To comply with VAT legislation and help combat tax fraud, we recently began a process to perform additional verification of the VAT status of all sellers, in the UK and abroad, that sell on our UK store.
“While we tried to make this process as smooth as possible, it did not meet the high standards that we hold ourselves to and we apologise to sellers who experienced issues with verification.
“We are taking this situation extremely seriously, committing additional resources to improve and speed up the process. We’ve already verified the majority of sellers, and we are working to verify the remaining sellers as quickly and smoothly as possible.
“We encourage Government to continue to improve the public information available to determine if a seller is UK-based for VAT purposes.”
A spokesperson for HMRC said: “We do not freeze online seller accounts in cases like these. To calculate their correct VAT liability, online marketplaces need to check if a business is based overseas as well as the location of goods sold on their platform; HMRC does not carry out these checks.
“Rules that require online marketplaces to take reasonable steps to determine if they are liable for VAT have been in place since January 2021.
“We will take a supportive approach to dealing with customers who may be experiencing issues.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel