Tax for Shopify Sellers
Shopify is your own shop, not a marketplace. That means there is no "deemed supplier" shield — once you are VAT-registered, you account for all the VAT yourself on every sale.
You handle all the VAT
On marketplaces like Amazon or eBay the platform sometimes accounts for VAT for you. On Shopify there is no such shield — you are the supplier and you account for VAT on your sales.
No marketplace is collecting VAT on your behalf, so your VAT compliance is entirely your responsibility.
The £90,000 threshold and MTD
Register for VAT once taxable turnover passes £90,000 on a rolling 12-month basis. Once registered, Making Tax Digital for VAT is mandatory, so you’ll keep digital records and file online.
Shopify Payments and payouts
Shopify Payments deducts processing fees before paying out, so your taxable turnover is the gross order value, not the net payout that reaches your bank.
Reconcile from gross orders and book Shopify and gateway fees as separate expenses.
App subscriptions and costs
Your Shopify plan, themes and app subscriptions are allowable business expenses, and any VAT on them is normally reclaimable once you are VAT-registered.
- Shopify subscription and transaction fees
- Paid themes and apps
- Payment gateway charges
International sales and OSS
Selling into the EU can bring VAT obligations there; the One Stop Shop (OSS) and IOSS schemes can simplify EU distance sales, with a £135 consignment threshold for imports.
Imported consignments not over £135 are treated differently from higher-value shipments for VAT.
Multi-channel and structure
If you also sell on marketplaces, combine all channels for the £90,000 test. As profits grow, a limited company (Corporation Tax 19%–25%) may suit; the Flat Rate limited-cost rate is 16.5%.
Common questions
Does Shopify handle VAT for me like Amazon does?
No. Shopify is your own store, not a marketplace, so there is no deemed-supplier rule. Once VAT-registered, you account for all the VAT on your sales yourself.
Is my turnover the amount Shopify pays out?
No. Your taxable turnover is the gross order value before Shopify Payments deducts its fees. Record the fees separately as expenses.
What about selling to EU customers?
EU sales can create VAT obligations abroad. The OSS and IOSS schemes can simplify distance selling, and a £135 consignment threshold governs import VAT treatment.
Get expert eyes on your tax
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For guidance only — this factsheet does not constitute professional advice and is not a substitute for advice based on your specific circumstances. Whilst every care has been taken in its preparation, it may contain errors for which we cannot be responsible. Figures are for the 2025/26UK tax year (England, Wales & Northern Ireland) and may change. Last reviewed 6 June 2026.