UK government urges Amazon to unfreeze seller funds

The British government has issued an urgent plea to Amazon to unfreeze seller funds. Kevin Hollinrake, the enterprise minister, expressed deep concern after a flood of complaints. “I would urge you to look into this issue further as a matter of urgency”, he wrote to Amazon.

Approximately four hundred complaints were received by Liz Barclay, the small business commissioner, who decided to delve into the matter last week. It had become evident that many British entrepreneurs faced difficulties due to the payment blockade imposed by Amazon, alleging insufficient evidence of their United Kingdom establishment. “We have been inundated with email appeals for help from desperate sellers in danger of losing their businesses”, noted Barclay.

Lack of communication

British sellers are uncertain about why their legitimacy is being questioned. They are unsure about the specific reasons for the blockade and clueless about how to resolve it. They criticize the inadequate communication and accessibility of the United Kingdom’s ecommerce market leader. Amazon reported a revenue of over 31 million euros in the UK last year, a 12 percent increase from 2022.

VAT requirement

The traders express their grievances on Amazon UK’s Seller Central forum, where over 2,100 responses on the issue have been received. Amazon provided a brief response on Friday, stating: “Sellers may receive a request for information from Amazon to confirm where their business is established. This is a requirement under UK VAT law, and we aim to minimize any inconvenience it may cause to your business.”

Amazon: ‘We aim to minimize any inconvenience.’

Sellers are waiting for payments of as much as hundreds of thousands of euros due to the new VAT checks. This has raised concerns about the survival of businesses, prompting the British government to act.

‘A knee-jerk basis’

Enterprise minister Kevin Hollinrake says: “We are writing to Amazon to tell them to unfreeze the accounts until they have a proper process that is in place. We understand why they are doing it – we need to ensure VAT is collected – but doing it on a knee-jerk basis, especially at a time when there is self-assessment due, is pretty ill-timed.”

Previously, numerous European Amazon traders had their funds wrongly frozen, as reported by German media in November. The company then acknowledged that mistakes were made.