Amazon Seller Accountants
Settlement reports read properly, stock valued correctly and VAT handled before it becomes a problem. Accounts and tax for FBA and merchant-fulfilled sellers. Fixed fees, free first conversation.
Your bank deposit is not your turnover
Amazon pays you net of fees, refunds and advertising — often 30 to 40% below your actual sales. Most seller accounts we take over have this wrong, and stock valuation wrong alongside it.
Gross sales as turnover, fees claimed separately as costs.
Inventory is an asset until it sells. Getting this wrong distorts everything.
Stock held abroad can create obligations you did not know you had.
Accountants for Amazon FBA and Marketplace Sellers
Amazon selling is a stock business with a payment system that obscures your actual numbers. Settlements arrive net of six or seven different deductions, inventory ties up cash before it becomes profit, and VAT depends on where your goods physically sit.
None of that is unmanageable, but it is different enough from ordinary self-employment that generic accounting advice tends to produce the wrong answer. We handle the bookkeeping, VAT and company accounts for sellers, and start by making sure the underlying figures are right.
Four Things Amazon Sellers Get Wrong
These come up on almost every set of seller accounts we take over.
Stock is not an expense until it sells
This is the single biggest error we see. Inventory you have bought but not yet sold is an asset, not a cost. Treating a large stock purchase as an expense in the year you bought it can understate profit dramatically — and overstate it just as badly the following year.
Gross sales, not bank deposits
Amazon pays you net of fees every couple of weeks. Your turnover is the gross sales figure; the fees are separate expenses. Declaring the deposit understates both, and Amazon reports seller data to HMRC.
Where your stock sits matters
Holding inventory in another country can create a VAT registration obligation there, entirely separately from your UK position. Programmes that move stock across borders automatically are the usual cause.
Marketplace VAT is not simple
Who accounts for VAT on a sale depends on where you are established, where the goods are, and their value. Amazon handles it in some situations and not others.
What Your Amazon Settlement Actually Says
Amazon deposits a single net figure roughly every two weeks. Behind it sits your gross sales, less referral fees, FBA fees, storage, advertising and refunds. Depending on your category and how heavily you advertise, the deposit can be 30 to 40% below what you actually sold.
Your accounts need the gross figure as turnover, with each deduction recorded separately as a cost. It is more work than copying a bank statement, but it is the only way to see which products are genuinely profitable — and it is what determines your VAT and Making Tax Digital position.
What each line means for your accounts
Product sales
Your turnover. This is the figure that goes on your accounts and tax return — not the amount Amazon deposited in your bank.
Referral fees
Amazon's commission on each sale, typically a percentage of the sale price. A business expense, claimed in full.
FBA fulfilment fees
Picking, packing and shipping charges per unit. Also a business expense.
Storage fees
Monthly and long-term storage. Long-term storage fees in particular tend to be forgotten because they arrive irregularly.
Refunds and reimbursements
Refunds reduce turnover; reimbursements for lost or damaged stock are income. They are not the same thing and should not be netted off.
Advertising
Sponsored Products and other Amazon Ads spend. Deducted from your settlement, and a claimable cost.
The Mistake That Distorts Everything
Say you spend £30,000 on inventory in March and have sold half of it by your year end. If the whole £30,000 goes through as a cost, your accounts show a loss that is not real — and next year they show a profit that is not real either, when the remaining stock sells with no cost attached to it.
Stock is an asset until it sells. Only the cost of what actually sold belongs in this year's profit. That means counting and valuing what is left at your year end, at cost — including freight and duty on imported goods, not just the supplier invoice.
It matters beyond the tax bill. Sellers with mis-stated stock are usually working from a profit figure that bears no relation to reality, which makes every decision about pricing, reinvestment and borrowing harder than it needs to be.
Amazon Seller Accounting Services
From a first year of trading to an established FBA business with stock in several countries.
Amazon Seller Accounts
Annual accounts built from settlement reports rather than bank statements, with stock properly valued and fees correctly categorised.
Self Assessment for Sellers
Personal tax returns for sole trader Amazon sellers and for directors drawing from a limited company.
VAT Registration and Returns
Whether you need to register, what Amazon accounts for and what you do, and the returns once you are in.
Stock and Cost of Goods Sold
Valuing closing stock properly so your profit figure reflects what you actually sold, not what you bought.
Bookkeeping and Reconciliation
Settlement reports reconciled to your bank, month by month, in Xero, QuickBooks or FreeAgent.
Corporation Tax
CT600 returns, capital allowances and profit extraction for Amazon businesses trading through a company.
Selling elsewhere too? We also work with eBay sellers and Shopify stores, or see our ecommerce accountancy page for multi-channel businesses.
Our Amazon Seller Process
We start with the settlement data, because that is where the real numbers are.
- Tell us about the business — sole trader or company, FBA or merchant fulfilled, UK only or selling abroad, and whether you are VAT registered.
- Give us access to your Seller Central reports and send bank statements, stock records and supplier invoices.
- We reconcile settlements to your bank, categorise fees and value your closing stock properly.
- We check your VAT position, including where your inventory is actually held.
- We prepare your accounts and returns and explain the figures — particularly the ones that differ from what you expected.
- We file with HMRC and Companies House, and set the bookkeeping up so next year is quicker.
Not Sure Your Amazon Numbers Are Right?
Most sellers who come to us have turnover, stock or VAT recorded incorrectly, and usually all three. We will look at it and tell you. Fixed fees, free first conversation.
Amazon Seller Tax Questions, Answered
Turnover, stock, fees, VAT, selling abroad and company structure.
Getting the numbers right
Gross sales. Amazon deposits your settlement net of referral fees, FBA fees, storage, advertising and refunds — sometimes 30 to 40% below your actual sales. Your turnover is the gross figure, with the fees claimed separately as business expenses. The tax outcome is broadly similar, but declaring the deposit understates your turnover, and Amazon shares seller data with HMRC under digital platform reporting rules. It also matters for VAT thresholds and Making Tax Digital, both of which are measured on turnover.
More than most sellers expect, and it is where we see the biggest errors. Inventory you have purchased but not yet sold is an asset, not an expense — the cost only hits your profit when the item sells. If you spend £30,000 on stock in March and treat it all as a cost, you will show a loss that is not real, and an inflated profit the following year when that stock sells. Getting closing stock valued properly is often the difference between a return that makes sense and one that does not.
All of them, as business expenses: referral fees, FBA fulfilment and storage fees, long-term storage, removal and disposal orders, advertising spend, subscription fees for a Professional account, and any repricing or research software you pay for. Long-term storage fees are the ones most often missed because they appear irregularly rather than on every settlement.
For anything beyond a handful of sales a month, yes. Amazon settlement data does not reconcile neatly to a bank statement without help, and doing it by hand becomes impractical quickly. We work with Xero, QuickBooks and FreeAgent and can advise on the linking tools that pull Seller Central data across.
VAT and selling abroad
Registration is required once taxable turnover exceeds £90,000 in a rolling 12-month period. The figure to watch is gross sales, not what Amazon deposited, which catches sellers out — a business hitting the threshold on gross sales may be seeing considerably less in the bank. Voluntary registration is sometimes worth considering where you have substantial input VAT on stock, though it changes your pricing position against non-registered sellers.
In some situations. Marketplace rules mean Amazon accounts for VAT on certain sales, depending on where the seller is established, where the goods are located and their value. For a UK-established seller shipping goods already in the UK, you generally account for your own VAT. It is not a question with one answer, and getting it wrong in either direction is expensive — worth checking your specific position properly.
Holding inventory in another country can create a VAT registration obligation in that country, separately from anything you do in the UK. This catches sellers who have opted into programmes that move stock across borders automatically, sometimes without appreciating that stock has been relocated. If you sell into the EU or have enabled anything that stores your inventory abroad, this needs checking before it becomes a historic problem.
If you import stock, yes. Import VAT and duty affect both your cash flow and your cost of goods, and postponed VAT accounting can help with the former if you are registered. The landed cost of imported stock — including duty and freight — is also what should be carried in your stock valuation, not just the supplier invoice.
Structure and getting started
If you are buying goods with the intention of selling them at a profit, that is trading from the first sale — there is no grace period for "just testing it". You can earn up to £1,000 gross in a tax year under the trading allowance without telling HMRC, but almost any serious Amazon activity passes that quickly. Once over, register for Self Assessment by 5 October following the end of that tax year.
Most sellers start as sole traders and incorporate later. A company tends to become worth considering as profits rise, where you are reinvesting heavily in stock, or where you want the liability separation. It brings more filing, more cost and some complications around moving existing stock into the company. We can model both against your actual numbers rather than a rule of thumb.
Yes. Under HMRC digital platform reporting rules, marketplaces including Amazon share seller income data with HMRC. It does not change what you owe, but it does mean undeclared or understated sales are considerably easier for HMRC to identify than they used to be.
If you are a sole trader, MTD for Income Tax applies by qualifying income — gross income, not profit. It already applies above £50,000, dropping to £30,000 from April 2027 and £20,000 from April 2028. Because it uses gross sales, Amazon sellers reach these thresholds far earlier than their profit would suggest. Sellers trading through a limited company are outside MTD for Income Tax, though VAT-registered businesses already keep digital VAT records.
Read more about our Making Tax Digital support. Rates, thresholds and marketplace VAT rules change — for the current position see GOV.UK VAT registration, or ask us to check where you stand.