Selling on Amazon is fast-moving. Fees, refunds, FBA storage charges and VAT all hit your account at different times, and none of it looks like a normal set of books. Many sellers only discover the problem when HMRC asks a question they can’t answer.
That is where ecommerce accountants come in. They understand marketplace data and can turn a messy Amazon settlement report into accurate accounts and a correct tax return. This guide explains what they do, what to expect in the UK, and how to choose one.
What Do Ecommerce Accountants Do for Amazon Sellers?
A general accountant can file your tax return. Ecommerce accountants go further and handle the parts of selling online that trip people up:
- Reconciling Amazon payouts: Amazon pays you net of fees, refunds and advertising costs. An accountant matches these to your sales so your profit figure is real.
- VAT compliance: Registration, returns and checking you charge the right rate.
- Stock and cost of goods: Tracking what you paid for inventory, including FBA stock sitting in warehouses.
- Tax planning: Choosing between sole trader and limited company, and taking income in a tax-efficient way.
- Software setup: Connecting tools such as Xero or QuickBooks to your Amazon account, often via apps like A2X or Link My Books.
UK Tax Rules Amazon Sellers Need to Know
VAT thresholds and registration
You must register for VAT if your taxable turnover goes over £90,000 in any rolling 12-month period, or you expect to exceed it in the next 30 days. You can register voluntarily below that, which can help you reclaim VAT on stock and expenses.
Note that the threshold counts your total sales, not profit, across all channels. If you sell on Amazon, eBay and your own Shopify store, add them together.
Marketplace facilitator rules
Amazon and other online marketplaces are legally responsible for the VAT on sales made by overseas sellers to UK customers, and overseas sellers must register for VAT from their first UK sale. UK-based sellers are different: you remain responsible for your own VAT registration and returns. Amazon’s VAT calculation tools can help, but they don’t file anything for you.
Making Tax Digital (MTD)
If you’re VAT-registered, you must keep digital records and file VAT returns through MTD-compatible software. Income Tax Self Assessment is also moving into MTD in phases, starting with sole traders and landlords with qualifying income above £50,000 from April 2026, then lower thresholds in later years. An accountant will tell you which date applies to you.
Other points to watch
- Trading allowance: The £1,000 allowance can cover very small sellers, but most Amazon businesses exceed it and must report their income.
- Platform reporting: Marketplaces now share seller income data with HMRC, so undeclared income is easier to spot.
- Import VAT: If you import stock, postponed VAT accounting can ease cash flow, but it must be recorded correctly.
Note: Tax rules and thresholds change. Verify all figures with HMRC (gov.uk) before relying on them or publishing this content.
Why Amazon Sellers Need Specialist Ecommerce Accountants
Here’s a practical example. Sarah sells homeware through FBA and turns over £75,000 a year. She’s growing 40% annually, so she’ll cross the VAT threshold within months. A specialist accountant would spot this early, register her at the right time and advise on whether to use the flat rate scheme or standard accounting. A generalist might only notice after a late registration penalty.
Specialists also catch costs sellers commonly miss, such as FBA fees, advertising spend, returns and inventory write-offs. Claiming them correctly reduces your tax bill legitimately.
How to Choose Ecommerce Accountants: A Checklist
Use this list when comparing firms:
- Experience with Amazon FBA and FBM sellers
- Familiarity with Xero, QuickBooks and Amazon reconciliation tools
- Clear, fixed monthly pricing
- Knowledge of UK and EU VAT, including selling to other countries
- MTD-compliant filing
- Proactive advice, not just year-end paperwork
- Good reviews from other online sellers
Expect to pay roughly £100 to £400 a month depending on your turnover and the services included, though prices vary by firm.
Frequently Asked Questions
Do I need an accountant to sell on Amazon?
It isn’t a legal requirement, but it’s strongly advisable once you’re VAT-registered or growing quickly. Mistakes with VAT and fees can cost more than the accountant’s fee.
Does Amazon pay VAT for me?
No, not if you’re a UK seller. Amazon may calculate VAT on sales, but you remain responsible for registering, filing returns and paying HMRC.
Should I be a sole trader or limited company?
It depends on your profit level and goals. Limited companies pay corporation tax and offer more flexibility on how you take income, while sole traders have simpler admin. An accountant can model both for you.
Can I claim Amazon fees as expenses?
Yes. Referral fees, FBA fees, advertising costs and storage charges are generally allowable business expenses, provided they’re recorded properly.
What happens if I miss the VAT threshold?
HMRC can charge penalties and interest on VAT you should have collected, and you may have to pay it from your own pocket. Monitor your rolling 12-month turnover monthly.
Conclusion: Get the Right Ecommerce Accountants on Your Side
Amazon selling rewards speed, but tax and VAT reward accuracy. The right ecommerce accountants for Amazon sellers keep your books clean, your VAT correct and your profits protected, freeing you to focus on growth.
Ready to stop worrying about VAT and tax? Book a free consultation with our ecommerce accounting team today and get a clear picture of where your business stands.
