Bookkeeping for Amazon, Shopify and eBay Sellers — A UK VAT Guide

Why e-commerce bookkeeping is harder than it looks

A shop with one till and one bank account has a fairly simple reconciliation job. A seller on Amazon, Shopify and eBay simultaneously is reconciling multiple sales channels, multiple payout schedules, marketplace fees, refunds, and — often — stock sitting in a fulfilment network they don't directly control. Get the bookkeeping wrong here and it's easy to overstate revenue, miss deductible fees, or misjudge your VAT position.

The core reconciliation problem

Marketplaces don't pay you gross sales — they pay you net, after deducting commission, fulfilment fees, advertising spend, and refunds, often on a rolling settlement cycle rather than per transaction. If you record the payout amount that lands in your bank as "sales," you understate revenue and overstate profitability, and your VAT calculation (if VAT-registered) can end up wrong because you're not working from the actual sale value.

The correct approach: reconcile at the level of the platform's own sales report (Amazon Seller Central, Shopify's sales reports, eBay Seller Hub), not the bank deposit. Gross sales, marketplace fees, and refunds should each appear as separate lines, not be netted off before they reach your bookkeeping software.

VAT on marketplace sales

VAT treatment depends on how you're selling and to whom:

• UK sales to UK customers, sold directly (not through "Fulfilled by Amazon" cross-border arrangements), are treated like any other UK sale — standard VAT rules apply once you're registered, with the same £90,000 registration threshold as any other business.
• Sales through a marketplace facilitator can shift VAT liability to the platform itself in certain circumstances (particularly for overseas sellers or goods stored overseas and sold to UK consumers) — this is a specific and detailed area, and if any part of your stock or sales touches overseas fulfilment, it is worth getting this checked rather than assuming standard UK VAT rules apply unmodified.
• Multi-channel sellers need visibility across every platform to know their true UK taxable turnover for the VAT registration threshold — turnover from Amazon, Shopify and eBay is combined, not assessed separately per platform.

Payment processor and platform fee tracking

Beyond marketplace commission, most e-commerce sellers are also paying:

• Payment processing fees (Stripe, PayPal, Shopify Payments)
• Advertising spend (Amazon PPC, Meta Ads, Google Shopping)
• Fulfilment and storage fees (FBA, 3PL warehousing)
• Software subscriptions (inventory management, listing tools)

Each of these is a legitimate business expense, but they need to be coded correctly and consistently — lumping them all into "other expenses" makes it impossible to see which channel or product line is actually profitable.

A practical monthly routine

• Pull each platform's monthly sales and fees report before reconciling bank deposits against it
• Record gross sales, fees, and refunds as separate lines — never just the net payout
• Reconcile payment processor statements (Stripe/PayPal) separately from the underlying platform sales, since timing between a sale and the payout rarely lines up neatly
• Review VAT-registered taxable turnover across all channels combined, not per platform, when checking against the registration threshold
• If any stock is held or fulfilled overseas, get the cross-border VAT position checked specifically — this is not a "default rules apply" situation

E-commerce bookkeeping done properly gives you an accurate picture of which products and channels are actually making money — which is usually different from what the bank balance alone suggests.