Ecommerce Accountants for Online Sellers
UK VAT, US sales tax nexus, and healthy margins for physical-product retailers on Amazon, Shopify, eBay, and your own store — handled by specialists who work across HMRC and the IRS.
Ecommerce accounting is specialist tax and bookkeeping support for businesses that sell physical products online. It is built for classic online retailers — Amazon and Shopify sellers, FBA brands, and multichannel merchants — who juggle VAT, US sales tax nexus, inventory, and margin across the UK and United States at the same time.
Not the same as digital ecommerce
This page covers physical-goods retail. If you sell downloads, subscriptions, or SaaS, see our digital ecommerce page, where the VAT place-of-supply and sales-tax rules work differently.
How does UK VAT work for online sellers?
VAT is usually the single biggest compliance headache for UK-based ecommerce brands. You must register for VAT once your taxable turnover passes the 90,000 pound threshold in any rolling 12-month window, and charge the standard 20% rate on most physical goods. Some products — children's clothing, books, and certain foods — are zero-rated or reduced-rated, so correct product coding directly affects your price competitiveness and your margin.
Overseas sellers who store stock in a UK fulfilment centre, or sell goods already located in Great Britain, generally register from their first sale with no threshold. Marketplaces such as Amazon account for VAT on many of these sales as a deemed supplier, but you still need clean registrations, accurate Making Tax Digital records, and quarterly returns. We reconcile marketplace VAT reports against your own ledgers so nothing is double-counted or missed.
What is US sales tax nexus and does it affect me?
In the United States there is no national sales tax — each state sets its own rules, and thousands of local jurisdictions add their own rates. You only have to collect where you have nexus. Physical nexus is created by inventory, staff, or premises in a state; if you use Amazon FBA, your stock can be moved between warehouses in multiple states, quietly creating obligations you never planned for.
Since the 2018 South Dakota v. Wayfair decision, states also enforce economic nexus. A common threshold is 100,000 dollars of sales or 200 separate transactions into a state in a year, though the exact figures differ and some states have dropped the transaction count. Marketplace facilitator laws mean Amazon and eBay collect and remit for most marketplace orders, but your own Shopify checkout is your responsibility. We map where you have nexus, register you efficiently, and avoid over-registering in states where you have no real exposure.
How do Amazon and Shopify change your accounting?
Each channel reports differently, and that is where profit gets lost. Amazon settlements bundle sales, referral fees, FBA fees, storage, refunds, and reserve balances into fortnightly payouts that rarely match a clean sales figure. Shopify plus payment processors, plus apps for subscriptions or shipping, add more data streams. Without proper integration you cannot see true profit by SKU, by channel, or by country.
We connect your marketplaces and storefronts to cloud accounting software, so every fee, refund, and foreign-currency conversion lands in the right place. That gives you real-time gross margin, accurate VAT and sales-tax liabilities, and inventory that ties back to your bank. If you are scaling into new territories, read our guide to US-UK business expansion to plan the tax side before you ship.
Why do COGS and margin matter so much in retail?
Physical-product businesses live and die by cost of goods sold. COGS is opening inventory plus purchases, inbound freight, and import duties, minus closing inventory — it excludes marketing and overheads. Get it wrong and your reported profit, tax bill, and inventory valuation are all wrong too. Both HMRC and the IRS expect a consistent valuation method such as FIFO or weighted average, applied year after year.
We build management accounts that show gross margin after true landed cost, including customs duty, import VAT, and the currency spread on overseas purchases. That is the number that tells you which products to scale and which to drop. Layered on top, we plan for corporation tax, capital allowances on equipment, and cash-flow tools such as postponed VAT accounting so growth does not strangle your working capital.
One Team Powering Your Ecommerce Tax Strategy
Built for multichannel retail
We work with product-based businesses every day, so we understand marketplace settlements, FBA logistics, thin margins, and the reality of selling into two tax systems at once. One team handles both your UK and US obligations, so you get joined-up advice instead of conflicting answers from separate advisers.
› Get a ConsultationCross-border by default
HMRC and IRS handled together — VAT, sales tax, and corporation tax under one roof.
Marketplace fluent
Amazon, Shopify, eBay, Etsy and TikTok Shop settlements reconciled to the penny.
Margin-first reporting
Real gross margin after landed cost, so you know which SKUs actually make money.
Scale-ready structuring
Sole trader, limited company, LLC or C-corp advice as you grow into new markets.
Where to go next
Digital Ecommerce →
Selling downloads, subscriptions, or SaaS instead of physical goods.
Ecommerce Accountants →
Full-service bookkeeping and accounts for online retailers.
US Tax Services →
IRS compliance, federal and state filings for cross-border sellers.
UK Tax Services →
VAT, corporation tax, and Making Tax Digital support.
Cross-Border Tax Planning →
Structure your business efficiently across the UK and US.
US-UK Business Expansion →
Plan the tax side before you ship into a new market.
Ready to fix your ecommerce tax?
Book a consultation and we will map your VAT, sales-tax nexus, and margins across the UK and US — then build a plan that lets you scale with confidence.
One connected view of every marketplace and store
Amazon, Shopify, eBay, Etsy and TikTok Shop each report sales, fees and refunds in their own way, and that fragmentation is where profit quietly leaks away. We integrate your channels into cloud accounting so every settlement, currency conversion and marketplace fee lands in the right place.
With clean data flowing automatically, you get real-time gross margin by SKU and by channel, plus tax figures you can actually trust when returns fall due.
- ›Marketplace settlements reconciled to the penny
- ›Real profit visible by product and by channel
- ›Live figures for VAT and sales-tax liabilities
UK VAT and US sales tax handled under one roof
Selling into two tax systems means juggling VAT registrations, US sales tax nexus, import duties and inventory rules at the same time. Our specialists work across HMRC and the IRS together, so you get joined-up advice instead of conflicting answers from separate advisers.
From nexus mapping and registrations to landed-cost margin planning and the right trading structure, we keep your compliance tidy while you focus on scaling into new markets.
- ›Nexus mapping so you register only where you must
- ›Import VAT and duty planned into true landed cost
- ›Structuring advice as you grow across borders
Official resources & further reading
Authoritative guidance from the relevant tax authorities and regulators. Always confirm current thresholds and deadlines on the official source.
Questions & Answers
UK-established ecommerce businesses must register for VAT once taxable turnover exceeds the registration threshold, currently 90,000 pounds in any rolling 12-month period. Overseas sellers holding stock in the UK, or selling goods already in Great Britain to UK consumers, generally must register from their first sale with no threshold. Voluntary registration can also help reclaim input VAT.
Nexus is the connection that obliges you to collect sales tax in a US state. Physical nexus comes from inventory, staff, or an office in a state, including Amazon FBA warehouses. Economic nexus is triggered by sales volume, commonly 100,000 dollars in revenue or 200 transactions per state per year, though thresholds vary by state.
Amazon acts as a marketplace facilitator and collects US sales tax on your behalf in most states, and accounts for UK VAT on many marketplace sales. Shopify does not remit tax for you; it only calculates and collects amounts you configure, leaving filing and payment your responsibility. You still need accurate registrations and returns in both cases.
COGS captures the direct cost of items you sold in a period: opening inventory plus purchases and inbound freight and duties, minus closing inventory. It excludes marketing, software, and overheads. Accurate COGS is essential for gross margin, taxable profit, and inventory valuation, and both HMRC and the IRS expect a consistent, evidenced method such as FIFO or weighted average.
Goods entering the UK attract import VAT and, above certain values, customs duty based on commodity codes and country of origin. The low-value consignment relief was removed, so UK import VAT applies to most consignments; sellers can use postponed VAT accounting to ease cash flow. US imports face duties governed by the de minimis rules, which are changing, so classification and valuation matter.
Many UK sellers start as sole traders, then incorporate as profits grow to access the lower corporation tax rate and limited liability. In the US, sellers often use an LLC or C-corporation depending on scale and investor plans. The right structure depends on margins, reinvestment, cross-border sales, and exit goals, so it is worth reviewing with a specialist adviser.
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