Small business minister urges Amazon to unfreeze seller funds

Small business minister urges Amazon to unfreeze seller funds
Dan Martin
Dan MartinDan Martin Content & Events

Posted: Wed 7th Feb 2024

Kevin Hollinrake, the UK government's small business minister, has called on Amazon to release funds to small businesses selling on the online marketplace after their accounts were frozen due to stricter VAT checks.

Amazon is checking whether sellers are based in the UK for tax purposes, but those investigations have led to a pause in money from sales being released to businesses.

Hundreds of small business owners have contacted the office of the Small Business Commissioner, which helps small firms tackle overdue payments from large companies, saying their cash has been withheld by Amazon for several weeks.

In a letter to John Boumphrey, Amazon's UK and Ireland vice present, Hollinrake said while he understands the need for checks to ensure Amazon is complying with tax legislation, they are impacting on small businesses' cashflow and ability to trade. Hollinrake wrote:

"While Amazon has said the checks should only take a few days, in many case it is taking much longer and has happened without sellers being given clear indication of when they will be able to trade again.

"Businesses are reporting having been asked repeatedly for information they have previously provided, asked to send personal documents over unsecured email and also report their frustrations at not being able to contact anyone in Amazon to deal with the problems that have arisen.

"I would urge you to look into this issue further as a matter of urgency and ensure you are supporting those whose accounts have been impacted by this. I would also ask that, until Amazon is in a position to efficiently process applications and engage effectively with your sellers, you unfreeze all the accounts of small businesses still impacted and allow these vital businesses to continue to operate."

A spokesperson told the Telegraph:

"Under UK tax legislation, online stores are required to collect and remit VAT on transactions involving overseas sellers. We therefore require verification of all sellers, which may include additional requests for information about where they are based.

"We aim to minimise any inconvenience this may cause sellers and they can contact our support teams for further advice."

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance journalist and event host who helps small businesses and the organisations that support them. I'm also Enterprise Nation's news reporter and Bristol Local Leader. I have 20 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from famous names like Sir Richard Branson and Deborah Meaden to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I now freelance for Enterprise Nation as the website's news reporter and as the host of the Small Business sessions podcast. I'm based in Bristol where I run and host regular events with the local small business community in my role as Enterprise Nation's Local Leader for Bristol. I also have strong connections with other major business organisations in the south west region. In total, I've hosted over 100 events including conferences with an audience of hundreds for international brands like Xero and Facebook and live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography.

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