We are calling on readers to back our campaign to get VAT deducted from Amazon Prime subscriptions by signing an online petition.
Tens of thousands of packages are sent to Jersey’s Amazon customers every year and a significant number of people have signed up to Amazon Prime, which entitles members to free delivery and a range of other benefits.
While the retail giant clearly understands Jersey’s VAT-free status – and therefore that it is a distinct self-governing jurisdiction with its own tax regime that is not part of the UK – by removing VAT from items delivered to Jersey, Islanders are still being overcharged for Prime subscriptions.
The £7.99 subscription fee for Prime UK entitles users to ‘unlimited’ one-day shipping services and a range of other benefits including video streaming, access to music, podcasts and e-books.
With a 20 per cent reduction it should cost £6.66 a month.
UK value-added tax – a sales tax added to the price of goods and services – is charged at 20 per cent, while the Jersey equivalent – the goods and sales tax – is five per cent. However, GST is not payable on a simple subscription which does not involve the importation of physical goods.
TO SIGN THE JEP PETITION, click here.
Jersey residents who have tried to have the VAT taken off their memberships have been met only with generic responses that do not not seem to acknowledge that Channel Islanders are not required to pay VAT.
As a result, many people are paying more than they should.
The Amazon campaign follows a similar initiative by this newspaper’s Fair Play consumer campaigning team a decade ago which was successful in getting Sky to deduct VAT from Islanders’ satellite television subscriptions. The JEP Fair Play team also succeeded in getting retailers in Jersey to remove the UK sales tax from items they sold.
When asked why they do not remove VAT on subscriptions, Amazon’s response is: ‘We don’t issue VAT refunds/exempt for Amazon Prime memberships as Amazon Prime is only available to customers using it for private use and not for Corporate Accounts, legal entities or for customers who purchase items for business or institutional use or for the purpose of resale.’
The request was made by a customer using the subscription for private use.
The JEP has also raised the matter with Amazon’s press office and asked what would be done about VAT charges for Channel Islands subscribers. The online retailer replied with little more than an ad for the service.
‘For just £79 a year, Prime members in the UK enjoy unlimited one-day delivery on millions of items, early access to Lightning Deals, unlimited streaming of thousands of popular movies and TV episodes, access to more than two million songs to stream or download, unlimited digital photo storage, and access to Kindle books,’ said Tom Parker, the corporate communications officer for the UK and Ireland.
‘Amazon Prime is a unique service, and whilst different locations are subject to different operating costs, it represents great value for our customers wherever it’s available.’
But Amazon Prime is offered in a range of countries with different pay structures. French subscribers, for example, pay 5.99 euros a month, while Spanish members pay a bargain 19.95 euros a year for the service.
Jersey is being ‘overcharged’ at the generic UK rate and the JEP is now asking readers to back its calls for Amazon to respect the Island’s tax sovereignty.
When the 2018 Budget was approved by the States last year it included amendments lodged by former Senator Philip Ozouf that called on the Treasury to engage with UK retailers and online giants like Amazon, to make them aware of the Island’s unique tax arrangements.
The Treasury Minister was asked to launch a ‘programme of engagement’ with UK companies that charge VAT and to find out how those businesses could instead levy the correct level of GST.
