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British Business Faces Financial Strain as Amazon Withholds £35,000 in Sales Funds

UNITED KINGDOM / AGILITYPR.NEWS / March 28, 2024 / Clim8, a leading provider of ice baths and reusable water bottles on Amazon, is grappling with financial hardship as Amazon continues to withhold £35,000 in sales revenue.

The issue arose in early January when Amazon blocked cash payments to many small sellers, including Clim8, as part of stricter checks to verify UK-based tax compliance. Despite Clim8's diligent efforts to provide ample evidence of their UK establishment - including 17 documents such as VAT bills, passports, government-issued Goods of Standing, utility bills, and bank statements - the funds remain inaccessible.

Christopher Hillary, Director of Clim8, said, "Amazon's withholding of our funds has severely impacted our business operations. Despite submitting numerous documents to prove our UK establishment, including essential financial records, Amazon continues to disregard our evidence, leaving us in a dire financial situation."

This echoes comments made by the enterprise minister Kevin Hollinrake who urged Amazon to unfreeze small business payments as far back as last month. Despite the government imploring the marketplace to take urgent action and pay UK SMEs promptly, a resolution has not yet been forthcoming.

Amazon's explanation cites legislation implemented on January 1, 2021, regarding UK VAT owed since then. However, Clim8 maintains that they have complied with all requirements and provided the necessary documentation for assessment. Despite repeated inquiries and calls to Amazon over the past month, with promises of resolution within 48 hours, the issue remains unresolved, with no direct access to the payment teams for further clarification.

Hillary explained, "As an Amazon-only business, the withholding of £35,000 has forced me to personally fund the business, including covering VAT bills. This financial strain has resulted in stock shortages, hindering our ability to operate effectively in the UK market and also impacting our Amazon USA operation."

Clim8 urges Amazon to expedite the resolution process and release the withheld funds promptly to alleviate the financial burden and allow the business to resume normal operations. Additionally, they call for greater transparency and communication from Amazon regarding the specific requirements for demonstrating UK tax compliance. 

For more information, visit https://shorturl.at/cAE24