Etsy settlement reconciliation
We match every Etsy payout, fee, refund and adjustment back to your bank, so gross sales and real costs are both captured, not just the net deposit.
Who we helpIndustry guide
The Etsy accountant who knows your shop.
Etsy fees, the trading allowance and your tax return sorted by accountants who understand a handmade business, so you can stay at the workbench.
You started your Etsy shop to make things, not to untangle settlement reports. As a specialist accountant for Etsy sellers, we take the messy bits off your hands: the fees Etsy buries in your payout, the VAT it sometimes collects for you, the £1,000 trading allowance, and the Self Assessment return at the end of it all. Knitter, candle-maker, vintage reseller or digital-download shop, we know how Etsy reports your figures to HMRC, and we make sure what you declare matches. Book a call with an Etsy accountant who actually gets the craft, on one fixed monthly fee.
- 4.9 Google · 63 reviews
- ACCA-qualified
- 30-day money-back
The problem
Why a Generic Accountant Often Gets Etsy Wrong
Most accountants treat an Etsy shop like any other small business. They take your payout figure, file it, and miss everything Etsy has already done to your money.
Etsy deducts fees and ad spend before you ever see a penny, collects VAT on some sales for you, and reports your gross takings to HMRC. A generalist who only sees the bank deposit gets your turnover wrong in both directions.
A specialist Etsy accountant works the other way round. We start from your settlement data, rebuild the real numbers, and make sure what you tell HMRC matches what Etsy already has. We do not just record your shop. We get it right.
Tailored services
What We Handle, So You Don't Have To
01 02 Materials and cost of goods
Yarn, clay, blanks, packaging and craft supplies tracked per product line, so you know the true margin on each listing, not a guess.
03 VAT, handled both ways
For some sales Etsy collects and remits the VAT for you; for others it lands on you. We map which is which so nothing is double-counted or missed.
04 Selling abroad
EU and international sales often see Etsy act as the supplier for VAT, but not always. We check whether you are covered or whether a reporting duty quietly sits with you.
05 Home studio and expenses
A share of your household bills, equipment, courier costs and mileage to craft fairs and the post office, all claimed against HMRC rules.
06 Tax return and year-end
Your Self Assessment return filed on time, Etsy income reconciled with any other work. We tell you the bill months early, so January holds no surprises.
Platform reporting
Does HMRC Check Etsy? Yes, and Here Is How
Under the UK digital-platform reporting rules, marketplaces like Etsy now report your sales and payout details to HMRC once you pass a modest annual threshold of sales and value.
HMRC cross-checks that report against your Self Assessment. If the income you declare does not line up with what Etsy sent, an automated nudge letter can follow.
That is why declaring your payout alone is risky. Your payout is already net of fees and any VAT Etsy collected, so it understates your gross turnover. We rebuild the full figure first, then reconcile it, so your return and Etsy agree before HMRC ever looks.
The £1,000 line
How Much Can You Sell on Etsy Before Paying Tax?
The trading allowance is the figure that matters most for a new shop. If your gross self-employed income, Etsy plus any other side work, is £1,000 or less in a tax year, you generally owe no tax on it and may not need to register at all.
Cross that £1,000 line and you must declare the income. Even then, the allowance can still help: you can choose to deduct the flat £1,000 instead of adding up your actual costs, whenever that leaves you better off.
Most sellers do not realise they have a choice, or which choice wins. We run both ways round, the flat £1,000 against your real materials and fees, and use whichever leaves more in your pocket.
Once your shop grows, the sole trader versus limited company question matters too. We tell you when, and if, going Ltd is worth it.
Allowable expenses
What Can Etsy Sellers Actually Claim?
More than most sellers think. Good accounting for an Etsy shop starts with claiming every legitimate cost against your sales.
- Raw materials, from yarn and clay to vintage stock you buy to resell
- Packaging, labels, tissue and shipping boxes
- Etsy listing, transaction and Etsy Ads fees
- Courier and postage costs (net of anything Etsy already deducted)
- A share of your home bills for the space you work in
- Tools and equipment, like a kiln, sewing machine or printer
- Your craft-fair pitch fees and table hire
- Mileage to fairs and the post office, at 55p a mile for the first 10,000 miles
We also keep an eye on your VAT position as you grow, and get your VAT registration timed right if you ever need it.
Cost of goods
Materials, Stock and the True Cost of a Handmade Item
A handmade or vintage business lives or dies on cost of goods. The price of yarn, blanks, findings or resale stock is the single biggest call on your takings, and it rarely matches the month you actually sell the piece.
We track your materials and stock properly, so the cost of an item lands against the sale it relates to, not the month you bought the supplies. That gives you a real margin per product line instead of a flattering payout figure.
Get this right and you can see which listings genuinely make money, price your next batch with confidence, and stop subsidising the products that quietly lose.
Day-to-day numbers
Bookkeeping for Etsy Sellers
Good books sound dull. Done right on an Etsy shop, they are the difference between guessing your profit and knowing it.
We set up your bookkeeping so your Etsy data flows into Xero, QuickBooks or FreeAgent automatically, fees, refunds and payouts reconciled, not retyped by hand.
That means accurate figures all year, a live view of what each product earns, and a shop that is ready for Making Tax Digital for Income Tax when it reaches you.
Growing the shop
From Side Hustle to Real Business
Plenty of Etsy shops start as a hobby and quietly turn into a proper income. The trouble is the tax rules change as you grow, and most sellers only find out after the fact.
As a sole trader you pay Income Tax and National Insurance through Self Assessment. Earn more and a limited company can keep more in your pocket, but it brings Corporation Tax and Companies House filing.
Take on help and payroll kicks in too. We watch your numbers as the shop grows and tell you when each change is worth making, before HMRC forces the question.
Simple, fixed fees
Fixed Monthly Pricing & Packages for Etsy Sellers
Most Etsy sellers pay between £99 and £199 a month. For a shop that ships every week, that is a handful of orders.
No hourly rates. No surprise bills. One fixed fee, a named, qualified accountant who understands a handmade business, and a 30-day money-back guarantee.
Essentials
Startups and small companies that need essential compliance and year-end support without VAT or payroll.
£99/month- Preparation of Company Year-End Financial Statements
- Year End Corporation Tax Computation
- Submission of CT600 to HMRC
- Statement of Account submissions to Companies House
Premium Plus
Growing businesses that need complete accounting services, VAT return management, and payroll handling.
£199/month- Everything in Essentials
- Quarterly VAT return calculation and submission
- Payroll and benefits management
Enterprise
Established businesses that want strategic mentoring, business planning, and a part-time finance director driving growth.
£499/month- Everything in Premium Plus
- Business mentoring
- Part-time finance director
- Business plan
Trusted by makers
What Our Clients Say.
I’ve used several accountants in the past, but hands down there is no one better than Harvey at Zmartly. He really understands exactly what advice you’re looking for and explains everything clearly and professionally. Nothing ever feels rushed…
HeenaVerified Google review · 4 months agoI’ve had an excellent experience working with Zmartly. Harvey and the team are professional, responsive, and genuinely supportive. They explain things clearly, stay on top of deadlines, and always look for practical ways to save tax and improve…
land4 success (chill feel good)Verified Google review · 5 months agoI started working with Zmartly Accountants after having serious issues with my previous accounting firm. They were missing deadlines, incorrectly calculating VAT, constantly late, and extremely difficult and frustrating to communicate with. Switching to Zmartly was a huge…
Jorge Carballo GomezVerified Google review · 5 months agoGreat proactive service always up to date regarding accounting legislation. Harvey and Team will be always helping you with advise how to make your books look good. Already over 4 years using their service very happy.
Auris Property AcademyVerified Google review · 8 months agoI've had a terrible experience with multiple accountants. Zmartly have been incredible. If you do ecommerce / Amazon FBA you definitely need to go with someone who understands the complexities with it. Thanks to Harvey and his amazing…
Sean BarringtonVerified Google review · 5 months agoI’ve used several accountants in the past, but hands down there is no one better than Harvey at Zmartly. He really understands exactly what advice you’re looking for and explains everything clearly and professionally. Nothing ever feels rushed…
HeenaVerified Google review · 4 months agoI’ve had an excellent experience working with Zmartly. Harvey and the team are professional, responsive, and genuinely supportive. They explain things clearly, stay on top of deadlines, and always look for practical ways to save tax and improve…
land4 success (chill feel good)Verified Google review · 5 months agoI started working with Zmartly Accountants after having serious issues with my previous accounting firm. They were missing deadlines, incorrectly calculating VAT, constantly late, and extremely difficult and frustrating to communicate with. Switching to Zmartly was a huge…
Jorge Carballo GomezVerified Google review · 5 months agoGreat proactive service always up to date regarding accounting legislation. Harvey and Team will be always helping you with advise how to make your books look good. Already over 4 years using their service very happy.
Auris Property AcademyVerified Google review · 8 months agoI've had a terrible experience with multiple accountants. Zmartly have been incredible. If you do ecommerce / Amazon FBA you definitely need to go with someone who understands the complexities with it. Thanks to Harvey and his amazing…
Sean BarringtonVerified Google review · 5 months ago
4.9
Google · based on 63 reviewsCommon questions
Frequently Asked Questions
If your gross Etsy income (before fees and costs) is more than £1,000 in a tax year, yes, you must register for Self Assessment and report it. Under £1,000 the trading allowance usually covers you. Either way, remember Etsy now reports your sales figures directly to HMRC, so it pays to match what you declare to what Etsy sent.
No. Etsy's payout is already net of fees, ads, shipping and any VAT it collected. For tax you declare your gross sales and then deduct allowable costs yourself. We rebuild this from your Etsy CSV so your return reflects true profit, not the deposited amount.
Only once your taxable turnover passes £90,000 in any rolling 12 months (you can deregister below £88,000). Sales where Etsy is the deemed supplier, most digital downloads and many low-value goods, are handled by Etsy, but you still need to track your own taxable turnover carefully. We monitor the threshold for you.
If you haven't given Etsy a UK VAT number, it treats you as a consumer and adds VAT to its fees, that's simply a business cost. Once you're VAT-registered and supply your number, Etsy applies the reverse charge instead, which you account for on your return. We set this up and report it correctly.
Generally no. Etsy is treated as the deemed supplier for digital items, so it charges and remits the VAT for you regardless of your size, there's no small-seller exemption to rely on. You receive your listed price less any VAT Etsy collected. We record these separately from your physical sales so your VAT position stays clear.
Raw materials, packaging and postage (net of what Etsy deducted), Etsy and payment fees, a portion of home and broadband costs for your studio, equipment under the Annual Investment Allowance, and 55p per mile for the first 10,000 business miles to fairs and the post office. If your costs are tiny, the flat £1,000 trading allowance may beat itemising, we check both.
Fixed monthly pricing from £99, £199 or £499 depending on your shop's size, rolling monthly, no lock-in, with a 30-day money-back guarantee. You get a named, qualified accountant, replies within 72 hours, and we work in Xero, QuickBooks, FreeAgent or Sage with your Etsy data flowing straight in.
Guides for etsy sellers
Plain-English explainers, kept current with the latest HMRC rules.
Stop guessing. Stop overpaying. Let's sort your tax once and for all.
Zmartly Ltd · 20–22 Wenlock Road, London N1 7GU · 020 8175 5145 · info@zmartly.co.uk
ICAEW, ACCA and AAT qualified accountants.
Further reading