Accountants for e-commerce businesses VAT, platforms, bookkeeping. Properly handled.

Who we work with in e-commerce

Our e-commerce clients range across the spectrum: solo Etsy and eBay sellers growing from side-hustle into full-time business, Amazon FBA sellers at various stages from first-launch to multi-six-figure turnover, Shopify direct-to-consumer brands with their own marketing and customer base, multi-channel sellers running parallel storefronts across 2-4 platforms, and print-on-demand operators using services like Printful or Gelato. Most are at the £100k-£500k turnover range — past the simple sole-trader stage but not yet ready for a Big Four firm.

The VAT minefield for e-commerce

VAT is where e-commerce sellers get into the most trouble. Three regimes regularly apply: UK VAT on UK sales above the £90k threshold; OSS (One Stop Shop) for distance sales to EU consumers above the country-specific thresholds; IOSS (Import One Stop Shop) for sales of imported goods up to €150 to EU consumers. On top of this, marketplace facilitator rules mean that Amazon, eBay and Etsy collect and remit VAT directly in some cases (notably US sales tax, EU IOSS, and UK overseas seller sales) which changes what you report. Getting this wrong leads to either overpaying significantly or owing back-VAT in multiple jurisdictions. We unpack which rules apply to your specific channel mix.

Bookkeeping integration with your platforms

Manual bookkeeping for e-commerce is a non-starter — too many transactions, too many fees, too many adjustments. We use specialist integration tools: A2X (the gold standard for Amazon, eBay and Shopify), Link My Books (similar coverage with friendly UK pricing), or Dext + custom rules for simpler setups. These tools pull settlement data from your platforms, parse it into the correct categories (sales, fees, refunds, FBA charges, etc.), and feed it into Xero, FreeAgent or QuickBooks. The result: accurate monthly P&L by channel without you spending evenings categorising Amazon statements.

Inventory accounting and cost of goods sold

For physical-product e-commerce, accurate cost of goods sold (COGS) is essential — both for understanding actual profit per item and for tax accuracy. We work with your inventory system (whether that's a dedicated platform like Linnworks, Cin7 or Ordoro, or simpler spreadsheet-based tracking) to calculate COGS correctly using FIFO or weighted-average methods. This matters most at year-end — closing inventory valuation directly affects your taxable profit. Many self-managed e-commerce books get this wrong, often overstating profit (and overpaying tax) because finished inventory isn't properly recognised on the balance sheet.

Should an e-commerce business be a limited company?

Almost always yes, once you're past the side-hustle stage. The reasons are mostly non-tax: limited liability (products carry product-liability risk — incorporation provides important personal asset protection); credibility with suppliers and bigger platforms (Amazon Business, wholesale accounts); easier to bring in investors or sell the business if you want to exit; cleaner separation of personal and business assets which matters more for inventory-based businesses. The tax case (extracting profits through dividends) is less compelling than it used to be at the new 2026/27 dividend rates, but for established e-commerce businesses the structural reasons usually win out.

What we do for e-commerce clients

Our Growth package (£125/month) is the typical entry point: bookkeeping integrated with your platforms via A2X or Link My Books, quarterly VAT returns, Self Assessment or CT600 depending on structure, monthly P&L by channel. Scale (£350/month) adds payroll if you've hired staff, management accounts with KPI dashboards, cashflow forecasting, and proactive tax planning. We also handle the one-off setup work that e-commerce specifically needs: platform integrations, VAT scheme decisions, inventory accounting setup, and the move from sole trader to limited company when the time comes. All packages include MTD ITSA / MTD VAT compliance and quarterly submissions.

Common e-commerce tax mistakes we fix

From clients who come to us from elsewhere: not reporting marketplace facilitator sales because they assume Amazon handles everything (they handle the VAT but you still report the income); missing the EU OSS threshold for distance sales and underpaying EU VAT; treating FBA fees as a deduction against gross sales rather than a separate expense category (creates inaccurate gross margin reporting); incorrect COGS calculation overstating profit at year-end; not claiming the right capital allowances on warehousing equipment, vehicles, or photographic gear; and missing the Annual Investment Allowance on inventory management systems and software.