Shopify accounting that reconciles to your bank.
Shopify Payments lands net of fees, refunds offset future payouts, and your VAT (Value Added Tax) return needs the gross. Most generalist accountants get that wrong. Specialist Shopify accountants do not.
A good Shopify accountant should understand the messy reality of running an e-commerce store: VAT that turns on at £90,000 of turnover, import VAT and duty on stock from overseas suppliers, the marketplace "deemed supplier" rules, Stripe and PayPal fees buried in your payouts, and now Making Tax Digital landing on the self-employed. Zmartly is a CIMA-regulated UK practice built for online sellers, you get a named Shopify accountant, fixed monthly pricing from £129, and replies within 72 hours, all on Xero, QuickBooks, FreeAgent or Sage. This page explains the specific tax rules that decide what a Shopify business actually keeps.
Why do Shopify sellers need a specialist accountant and bookkeeper?
- VAT registration at £90,000, and the trap of gross sales
- You must register for VAT once your taxable turnover passes £90,000 in any rolling 12 months (not your tax year), with deregistration available below £88,000. The figure that counts is your gross sales before Shopify, Stripe and PayPal deduct their fees, sellers regularly cross the line without realising because they look at the cash that lands in the bank, not the headline sales. Cross it and you owe 20% on standard-rated sales from the registration date whether or not you charged customers, so we monitor your rolling turnover and warn you before it bites.
- Import VAT and duty on every overseas consignment
- If you buy stock from China, the EU or anywhere outside the UK, import VAT (usually 20%) and potentially customs duty apply when goods enter the country. VAT-registered sellers should use postponed VAT accounting so you declare and reclaim the import VAT on the same return instead of paying it upfront at the border and waiting to recover it, a cash-flow swing that can run to thousands on a single container. We make sure your freight forwarder and courier are using your EORI (Economic Operators Registration and Identification) number correctly.
- The marketplace 'deemed supplier' rules can shift VAT off you
- For goods in consignments of £135 or less imported and sold to UK consumers, and for any overseas-seller goods already in the UK at the point of sale, the online marketplace, not you, is liable to account for the VAT at the point of sale. If you sell on Amazon, eBay or Etsy alongside your own Shopify store, the VAT treatment differs by channel, and getting it wrong means either double-paying or under-declaring. We reconcile each sales channel separately so your VAT return reflects who actually owes the tax.
- MTD for Income Tax is now arriving for sole traders
- Making Tax Digital for Income Tax applies from April 2026 to sole traders and landlords with qualifying income over £50,000, from April 2027 above £30,000, and from April 2028 above £20,000. If your Shopify store is run as a sole trade and your income clears these thresholds, you'll keep digital records and file quarterly updates instead of one annual return. We get your bookkeeping MTD-ready now so the switch is a non-event rather than a scramble.
Gross sales versus the cash in your bank.
One Shopify payout, from the gross sale down to the money that actually lands. Your VAT return is built on the top line, not the bottom one.
- Gross sales (what customers paid)
- £10,000
- Less refunds
- £600
- Less Shopify Payments and app fees
- £190
- Net payout into your bank
- £9,210
Your VAT return (Box 6) is based on the £10,000 gross, not the £9,210 that reached your bank. Most wrong VAT returns we see start by using the payout figure. A specialist Shopify accountant splits every payout so the right number goes on the return, and the books still reconcile to the bank.
Where does your Shopify bookkeeping and VAT go wrong?
These are the four we see most often, and a good Shopify accountant fixes every one of them before it becomes a bill.
- VAT charged on the net payout, not gross sales
- Shopify Payments lands in your bank net of fees and refunds. File your VAT (Value Added Tax) return on that figure and you understate Box 6, which is exactly the mismatch HMRC's platform data now flags.
- Reverse charge on ad invoices missed
- Your Meta, Google and TikTok ad invoices arrive from Ireland with no VAT on them. That does not mean no VAT is due: it goes on your return under the reverse charge, and getting it wrong is one of the most common errors we see on sellers' returns.
- Cost of goods left at Shopify's estimate
- Shopify's margin figures ignore duty, freight and the real landed cost of your stock. Book profit on that basis and you are taxed on a number that was never real.
- Overseas tax ignored until it is a problem
- Cross a US state's economic-nexus threshold, or start holding stock in the EU, and a sales-tax or VAT liability is building whether or not anyone has registered you. We flag it early, not after the assessment lands.
What does our Shopify accounting service cover?
01Getting VAT right across your channels and OSS/IOSS
Your own Shopify checkout, Amazon, eBay, Etsy and TikTok Shop can each carry different VAT treatment, and selling into the EU adds the One Stop Shop (OSS) and Import One Stop Shop (IOSS) for low-value goods up to £135/€150. We register you for VAT when £90,000 demands it, choose between standard, cash or Flat Rate accounting, decide whether OSS/IOSS or local registration fits your EU volumes, and file MTD-compliant returns. The aim is one clean VAT position across every place you sell, not a patchwork that triggers HMRC queries. A specialist Shopify accountant keeps that position clean as you add channels.
02Reconciling Shopify, Stripe, PayPal and Klarna payouts
A Shopify payout is rarely one clean number, it nets off transaction fees, refunds, chargebacks, currency conversion and Klarna or Clearpay settlements before the cash reaches you. If you only record the bank deposit, your turnover is understated (a VAT-threshold risk) and your costs are hidden. Your Shopify accountant connects Xero, QuickBooks or FreeAgent to your gateways so gross sales, fees and refunds are each posted correctly, giving you real margin figures and a VAT return that ties back to source data.
03Claiming every legitimate e-commerce cost
Shopify and app subscriptions, payment processing fees, packaging and postage, product samples, paid ads, influencer fees, photography, returns and a proportion of home-office and mileage costs (55p per mile for the first 10,000 business miles, then 25p) are all deductible. There's a £1,000 trading allowance if your side-hustle store is genuinely small. For stock, you hold cost as inventory and only relieve it as cost of sales when items sell, a distinction that catches out sellers sitting on unsold stock at year end. We build your chart of accounts around how an e-commerce business actually spends.
04Sole trader vs limited company for your Shopify store
Below the higher-rate band, a sole trade is simpler and avoids Companies House filings; once profits are sustained and reinvested, a limited company often wins. Corporation Tax is 19% up to £50,000 of profit and 25% above £250,000, with a 26.5% marginal rate in between. Salary-plus-dividend planning matters too: dividends carry their own tax rates on top of a £500 tax-free dividend allowance. We model both routes on your real numbers before you incorporate, so the decision is evidence-based.
05Capital allowances on equipment and the 2026 changes
Cameras, lighting, packing machinery, computers and warehouse fit-out can be written off in full under the £1,000,000 Annual Investment Allowance, with full expensing also available on qualifying new main-rate plant. From April 2026 the main-pool writing-down allowance falls from 18% to 14%, and a new 40% first-year allowance applies to main-rate plant, timing a large purchase across that date can change your relief. We plan capital spend so you claim the most generous allowance available.
06Digital platform reporting and your Shopify tax return
UK digital platforms have reported seller income to HMRC since January 2024. Reports covering the 2025 calendar year are due by 31 January 2026. That means marketplaces and apps you sell through are handing HMRC your sales data directly, and it must reconcile to what you declare. If you've been running an under-the-radar side store, the gap is now visible. We bring your filings in line with platform data and, where needed, make a clean disclosure before it becomes an enquiry.
How do you switch Shopify accountant without the hassle?
- 01
Discovery
Understanding your business needs.
- 02
Solution Design
Crafting your custom accounting strategy.
- 03
Onboarding
Quick and easy integration.
- 04
Regular Rhythm
Consistent monitoring and reporting.
Tax guides worth a read
Plain-English explainers, kept current with the latest HMRC rules.












Your Shopify tax and VAT questions, answered
When your taxable turnover passes £90,000 in any rolling 12-month period, measured on your gross sales before Shopify, Stripe or PayPal fees, not the cash that hits your bank. You can deregister if turnover falls below £88,000. We track your rolling figure and flag it before you cross, so you're never caught registering late and owing back-VAT you never charged.
Yes, import VAT (usually 20%) and potentially customs duty apply when goods enter the UK. If you're VAT-registered, postponed VAT accounting lets you declare and reclaim the import VAT on the same return rather than paying at the border and waiting to recover it, which protects your cash flow. You'll need a valid EORI number, and we make sure your courier or freight forwarder uses it correctly.
It depends on the goods. For imported consignments of £135 or less sold to UK consumers, and for overseas-seller stock already in the UK at the point of sale, the marketplace is liable to account for the VAT, not you. Goods sold through your own Shopify checkout are different: there the VAT is yours. We reconcile each channel separately so your return reflects who genuinely owes the tax on each sale.
At lower profits a sole trade is simpler and cheaper to run; once profits are sustained and you're reinvesting, a company is often more tax-efficient. Corporation Tax runs 19% up to £50,000 and 25% over £250,000, with a 26.5% marginal band between, and dividends carry their own tax rates on top of a £500 tax-free dividend allowance. We model both on your actual figures so you incorporate for the right reasons, at the right time.
If you trade as a sole trader, yes. MTD for Income Tax starts in April 2026 for qualifying income over £50,000, April 2027 over £30,000, and April 2028 over £20,000. You'll keep digital records and file quarterly updates instead of one annual return. We move your bookkeeping onto MTD-ready software now so the change is seamless when your turn comes.
UK digital platforms have reported seller income to HMRC since January 2024. Reports covering the 2025 calendar year are due by 31 January 2026. So HMRC increasingly sees marketplace and app sales directly, and it should match your declared figures. If there's a gap, we help you reconcile and, where appropriate, make a tidy disclosure before it turns into an enquiry.
Fixed monthly pricing from £129, £250 or £499 depending on the support you need, on a rolling monthly basis with no long tie-in and a 30-day money-back guarantee. You get a qualified, named accountant, replies within 72 hours, and support on Xero, QuickBooks, FreeAgent or Sage. No surprise bills, the price covers the e-commerce VAT, bookkeeping and accounts work your store actually needs.
No. Shopify gives you sales and payout reports, not accounts. It does not file your VAT return, produce statutory accounts, or work out your Corporation Tax or Self Assessment. Its reports also show revenue net of fees and estimate your margins, so they are a starting point for bookkeeping, never a substitute for it. We take the Shopify data, reconcile every payout back to gross sales, fees, refunds and shipping, and produce the accounts and returns HMRC actually asks for.
Both are good, and the honest answer is that the deciding factor is your reporting needs and what your Shopify accountant works in daily, not the badge on the software. What matters far more is the layer between Shopify and the ledger: we use A2X, or Link My Books depending on your volume, to split each Shopify payout back into gross sales, fees, refunds and shipping, so it posts correctly instead of as one lump sum. We set the whole stack up and run it as part of the fee, so there is nothing for you to configure or maintain.
You can while you sell on one channel, in one country, below the £90,000 VAT threshold. It gets difficult fast once refunds start offsetting future payouts, you take orders in more than one currency, you ship to the EU or US, or you run paid ads that fall under the reverse charge. Those are the points where DIY bookkeeping quietly drifts away from HMRC's rules. Most sellers who move to us had been either under-declaring VAT or overstating their profit, without realising it. That is usually the point where a specialist Shopify accountant earns their fee.
Shopify accountants who know your numbers.
Whether you sell one product or run multi-channel across Shopify, Amazon and TikTok Shop, hold stock or dropship, trade as a sole trader or a limited company, we set your accounting for Shopify up so it is accurate, understood and filed on time. You get a qualified, named Shopify accountant, not a call centre. Zmartly is CIMA-regulated and led by Harvey Dhillon, ACMA CGMA.
- VAT services for online sellers
- Bookkeeping services
- Corporation Tax
- Ecommerce accounting hub
- Amazon FBA sellers
- Sole traders
- Limited companies
Read our Google reviews from Shopify and ecommerce sellers, and see how we work before you commit.
Zmartly Ltd, 12 Hammersmith Grove, London W6 7AP. Call 020 8175 5145. We work with Shopify sellers across the UK from our West London office, so a local Shopify accountant is only a call away. Fixed monthly fees from £129 plus VAT, on a rolling monthly basis with no long tie-in.

Stop overpaying tax. Start filing in 5 days.
Thirty minutes with a qualified accountant. Most owners uncover £1,000-£3,000 in annual savings on the first call. If we are not the right fit, you walk away with a free tax review on the house.




