If you sell online through Shopify, Amazon, eBay or your own website, understanding VAT is essential. This guide covers when to register, how to charge VAT correctly, common VAT schemes, and how to stay compliant with HMRC. Ideal for UK e-commerce sellers looking to manage VAT returns efficiently and grow their business with confidence.

1. Understanding VAT for E-commerce
Businesses in the UK
Running an e-commerce business in the UK comes with a unique set of financial responsibilities,
and one of the most important is understanding Value Added Tax (VAT). Whether you’re selling via
Shopify, Amazon, eBay, or your own website, getting VAT right is crucial for compliance and cash
flow. In this post, we’ll break down the key things online retailers need to know about VAT in the
UK—and how working with an e-commerce VAT accountant can make the process easier.

2. What is VAT and When Do You Need to Register?
VAT is a consumption tax charged on the sale of goods and services. If your UK e-commerce
business turnover exceeds £90,000 (2024/25 threshold) in a 12-month period, you must
register for VAT with HMRC.
However, many small business owners choose to register voluntarily before hitting the
threshold, especially when:
• They want to reclaim VAT on business expenses
• They sell primarily to VAT-registered businesses
• They wish to appear more established to customers and suppliers
If you're unsure whether now is the right time to register, speak to a professional offering VAT
registration for online sellers—the right advice could save you from costly mistakes later.
Charging VAT on Online Sales
Once VAT-registered, you must charge VAT on all eligible UK sales and include this in your
product pricing or at checkout. The standard VAT rate is 20%, although some goods may qualify
for reduced or zero rates.
Selling across platforms like Shopify, Amazon, Etsy, or eBay? Ensure your VAT settings are
correctly configured on each platform to avoid undercharging or misreporting. This is especially
important if you're filing VAT returns for Amazon sellers, where sales volumes can fluctuate
rapidly.
Selling Internationally: VAT Considerations
Post-Brexit, VAT on cross-border e-commerce sales has become more complex. If you're
exporting goods to the EU or beyond, you may need to:
• Register for VAT in the destination country
• Apply the correct VAT rate or exemptions
• Keep records for customs and compliance
For many small business owners, this can be overwhelming. That's where an experienced e-
commerce VAT accountant can offer practical, tailored advice.
VAT Returns and Digital Compliance
As a VAT-registered seller, you must:

3. • Submit quarterly VAT returns via Making Tax Digital (MTD)-compatible software
• Keep digital records of all sales, purchases, and VAT calculations
• Pay HMRC by the deadline to avoid penalties
Platforms like Xero, QuickBooks and FreeAgent integrate well with Shopify and other sales
channels, streamlining this process. Still, hiring an accountant to handle your VAT returns for e-
commerce businesses ensures accuracy and peace of mind.
Need Help with E-commerce VAT?
VAT doesn’t have to be a headache. At Doshi Accountants, our team of specialists supports
online retailers, Amazon sellers, and Shopify entrepreneurs across the UK with:
• VAT registration and deregistration
• Filing accurate VAT returns
• Cross-border VAT compliance
• Choosing the right VAT scheme for your business
Contact us today for a free consultation and see how we can help you stay compliant and focus
on growing your business.