Solaratax · Blog
Selling on Amazon in the UK: tax, VAT and records you actually need
2026-08-18 · Solaratax · extra guide
You are trading, even if Amazon takes the payment
If you sell goods regularly on Amazon in the UK, you are carrying on a trade. Sales are turnover. Amazon referral fees, FBA fees, advertising and storage are usually allowable expenses. Money arriving in your bank after fees is not your profit.
Download settlement reports and keep them with purchase invoices. A year-end screenshot of ‘payments’ is not a complete record. Stock still in a fulfilment centre is stock, not an expense, until it is sold or written off properly.
VAT is often the first registration you hit
Taxable turnover for VAT includes marketplace sales. Distance selling and goods stored in the UK can create a UK VAT obligation even if you live abroad. UK residents who grow quickly often cross the registration threshold mid-year and then discover they should have registered from an earlier date.
Read our notes on the VAT threshold and voluntary registration. Marketplace VAT programmes do not remove your duty to get the registration right.
Income Tax, companies and imports
Sole traders report profit on Self Assessment. A limited company reports through accounts and Corporation Tax. Import VAT, duty and delayed customs bills need a paper trail that matches the stock movement, not just the Amazon payout.
If you have been selling for years without returns, that is a disclosure issue, not a software issue. Contact Solaratax if you need the historic position put in order as well as the live books.
Questions we are asked
Is Amazon sending my figures to HMRC?
Marketplaces share data. You still have to file complete returns. Do not assume HMRC only knows what you declared.
Can I ignore FBA stock at the year end?
No. Unsold inventory is an asset. Expensing it all on purchase overstates costs and understates profit.
Do I need a limited company to sell on Amazon?
No. Many sellers start as sole traders. A company can make sense later for liability, finance or tax planning — see sole trader or limited company.
Keep reading
Tax for actors and performers: how UK Self Assessment actually works
Theatre, TV, touring and teaching rarely fit a single payslip. The tax return has to show the mix without mixing up employment and trade.
A practical tax guide for general partnerships
The partnership files a return. Each partner pays tax on their share. Mixing those two steps is how partnership tax goes wrong.
How do I register as a partner in a UK partnership?
Joining a partnership is not the same as registering a company. You need a Unique Taxpayer Reference, a profit share, and a partnership that already exists in HMRC’s eyes.