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Accountants for online sellers
Amazon, eBay, Etsy, Shopify, TikTok Shop, and your own website.
Your payout is not your sales figure
Every marketplace pays you net. Amazon takes referral and FBA fees, eBay takes final value fees, Etsy takes listing and transaction fees, and the payment processor takes its cut on top. Your turnover is the gross sales figure before all of that, and the fees are a separate deductible expense.
Building accounts from bank payouts alone will understate your sales, sometimes by fifteen or twenty per cent. It also makes the VAT threshold look further away than it is.
The VAT question, done properly
- Not everything you sell is standard rated. Most food, children’s clothing and books are zero rated. If you sell those, registering can put you in a repayment position - VAT back from HMRC rather than a bill.
- The registration threshold is tested on a rolling twelve months, not your accounting year. We watch it for you rather than finding out afterwards.
- Marketplace rules mean the platform is sometimes the deemed supplier and accounts for the VAT itself. That changes what goes on your return.
- Selling to customers outside the UK, or importing stock, brings its own treatment.
Stock, and why it changes your tax bill
Stock you have bought but not yet sold is not an expense of this year. Getting the closing stock figure right is usually the difference between the profit you think you made and the profit you are taxed on. If you hold inventory, we will take you through counting it once and then it becomes routine.
Under the digital platform reporting rules, marketplaces send HMRC your seller details and sales figures each year. If you have been selling seriously and not declaring it, it is much better to come forward than to be found. We can help you do that.
Common questions
Online sellers - the questions we get asked
I sell as a hobby. Do I need to declare it?
If your total income from selling is under the £1,000 trading allowance in a tax year, generally no. Above that you need to register and file. Selling your own second-hand belongings at a loss is different from buying stock to resell.
Should I register for VAT voluntarily?
Sometimes yes - particularly if what you sell is zero rated, like most food, because you reclaim VAT on your costs and charge none on your sales. If your customers are the public and your goods are standard rated, it usually costs you. We will run both.
Do I need to be a limited company?
Not necessarily. It depends on your profit level, whether you want to take money out, and what you plan to do next. We would rather talk it through than sell you an incorporation you did not need.