E-Commerce Tax Guide for UK Sellers: VAT, Corporation Tax, and More

Tax compliance is not optional. Here is a practical overview of UK tax obligations for e-commerce sellers.

VAT Registration

You must register for VAT when your taxable turnover exceeds 85,000 pounds in a 12-month period. You can register voluntarily below this threshold, which lets you reclaim VAT on expenses.

VAT on Amazon Sales

Amazon charges VAT on its fees. If you are VAT registered, you can reclaim this. Report your Amazon sales net of Amazon fees in your VAT return.

Corporation Tax

If you trade through a limited company, you pay corporation tax on profits. Keep accurate records of all business expenses to minimise your tax liability.

Record Keeping

• Keep all purchase invoices
• Download Amazon settlement reports monthly
• Track all business expenses with receipts
• Maintain clear categorisation of costs

Get Professional Advice

Use an accountant who understands e-commerce. The complexity of multi-channel, multi-currency selling means standard accounting often misses e-commerce specific deductions.

Need help structuring your e-commerce finances? Get in touch.