You can't walk into Amazon's warehouse and count your boxes. That's the awkward truth at the heart of every FBA seller's year-end. Your closing stock is a real number on your accounts, but the goods sit in fulfilment centres you'll never see, split across multiple sites, moving every hour of every day.
So how do you produce a stock figure your accountant can sign off, and HMRC won't query?
This guide walks you through the FBA year-end stock count step by step: which Amazon report to trust, how to reconcile it, how to value what's left at the right number, and the VAT traps that come with storing goods inside Amazon's network. It's written for UK sellers who account through a limited company or as a sole trader and need a defensible closing stock figure.
Why does an FBA stock count feel impossible?
Because you've outsourced custody but kept ownership. The stock is still yours, so it still belongs on your balance sheet at the year-end, even though Amazon holds it. You count it from Amazon's records, not from a physical stocktake, then sense-check those records hard.
A traditional stock count means closing the doors and counting shelves. With FBA you can't do that. Instead, you take a snapshot of what Amazon says you hold on your accounting year-end date, then reconcile it to your own purchase and sales records and adjust for anything Amazon has lost, damaged or is still receiving.
Closing stock matters because it directly moves your taxable profit. Stock you haven't sold is not a cost yet, so the higher your genuine closing stock, the higher your profit and tax for the period. Get it wrong and you've either overpaid tax or understated profit, and the error then unwinds into the following year. That's why year-end stock is a standard area HMRC looks at, and a core part of preparing accurate UK statutory accounts.
Which Amazon report do I use for the count?
Use the FBA Inventory Ledger report, set to the summary view, and pull the closing balance on your accounting year-end date.
The Inventory Ledger behaves like a bank statement for your stock. It shows a starting balance, then everything that moved: units received, customer orders, customer returns, adjustments, removals and the closing balance, by SKU and by fulfilment centre. That movement trail is what makes it reconcilable, which a simple "available units" snapshot is not.
Two practical points:
- Take the snapshot as at your exact year-end date (for example 31 March or 5 April), not "around then". Stock moves daily, so a few days' drift can shift the figure.
- Pull it in your reporting currency where you can, and keep a dated copy of the report. It's your audit evidence if the figure is ever questioned.
If you sell across more than one Amazon marketplace, you'll have inventory in more than one country. Each marketplace's stock is counted and valued separately, then added together. We'll come back to why the location matters for VAT later.
How do I reconcile FBA inventory to my year-end figure?
Reconciliation means proving that Amazon's closing units agree with your own records, and explaining every difference. It's the step most sellers skip, and the one your accountant cares about most.
Work through it like this:
- Start with your own expected units. Opening units, plus everything you sent in to Amazon during the year, minus units sold and refunded. That's what you think you should hold.
- Compare to the Inventory Ledger closing balance. Differences are normal. FBA is high-volume, and units get lost, damaged, disposed of or found.
- Investigate the gaps. Lost or damaged units that Amazon hasn't reimbursed are a reimbursement claim, not closing stock, so they come out of your count. Units Amazon is still receiving (in an inbound shipment) may or may not be "yours" at the year-end depending on whether they've arrived.
- Exclude what you don't own. Units you've already raised a removal order for and that have left Amazon belong wherever they physically are, not in the FBA count.
- Document the adjustments. A short reconciliation note explaining each difference is exactly what makes the figure defensible.
The goal isn't a perfect match. It's a closing figure you can explain. In practice the mistake we see most often is sellers taking the Amazon "available" number at face value, ignoring lost and in-transit units entirely, and ending up with a stock figure nobody can stand behind.
How do I value my closing FBA stock?
You value stock at the lower of cost and net realisable value. That's the standard rule under FRS 102 Section 13, and it's the basis HMRC sets out in its Business Income Manual.
Cost is what you paid to get the goods into a saleable condition and location. For an FBA seller that's the purchase price from your supplier, plus inbound freight, import duty and the cost of getting the goods to Amazon. It does not include Amazon's selling fees, your marketing, or the FBA fees you'll pay when the unit eventually sells, because those are costs of selling, not costs of bringing stock in.
Net realisable value (NRV) is, in HMRC's words drawn from FRS 102, the "estimated selling price less costs to complete and sell". So it's what you'd actually get for the unit, less the FBA fees, referral fees and any remaining costs to shift it.
You compare the two for each product line and use the lower one. NRV bites when stock has deteriorated, become obsolete or simply isn't selling at the price you hoped. HMRC's guidance is explicit that stock should be written down where there's no reasonable expectation of enough future revenue to cover its cost, and that the value is based on normal selling conditions, not a forced fire-sale.
For FBA sellers, three things commonly trigger an NRV write-down:
- Ageing stock racking up long-term storage fees. If holding it costs more than it's worth, NRV is below cost.
- Unsellable units. Stranded inventory, items Amazon won't fulfil, or stock flagged for disposal.
- Deep discounting to clear. If you can only sell at a loss after fees, NRV is your real recovery, not the original cost.
A worked FBA stock count and valuation
Illustrative example. Treat the figures as illustrative only; your own numbers and product mix will differ.
Maya runs a limited company selling kitchenware through Amazon FBA, with a 31 March 2026 year-end. She pulls her Inventory Ledger summary as at 31 March 2026 and reconciles it before valuing.
Step one, the unit reconciliation:
| Item | Units |
|---|---|
| Expected closing units (opening + sent in - sold - refunded) | 4,200 |
| Inventory Ledger closing balance (Amazon) | 4,090 |
| Difference to investigate | 110 |
| Of which: lost units, reimbursement claimed (exclude) | 60 |
| Of which: damaged, awaiting disposal (exclude) | 30 |
| Of which: timing on a customer return not yet relisted (include) | 20 |
| Units to value as closing stock | 4,000 |
Maya excludes the 90 lost and damaged units because they're a reimbursement claim, not stock she can sell. She keeps the 20 return units. That leaves 4,000 units to value.
Step two, the valuation. She has two product lines:
| Product line | Units | Cost per unit | NRV per unit | Lower value | Closing value |
|---|---|---|---|---|---|
| Chopping boards (selling well) | 3,000 | £6.00 | £11.00 | £6.00 | £18,000 |
| Travel mugs (slow, being cleared) | 1,000 | £8.00 | £5.50 | £5.50 | £5,500 |
| Total closing stock | 4,000 | £23,500 |
For the chopping boards, cost is below NRV, so she uses cost: 3,000 x £6.00 = £18,000. For the travel mugs, they're only clearing at a price that nets £5.50 a unit after FBA and referral fees, which is below the £8.00 cost, so NRV applies: 1,000 x £5.50 = £5,500. A £2.50 per unit write-down on the mugs reduces stock by £2,500 against cost, and that reduction lands as a cost in this year's profit and loss.
Closing stock is therefore £23,500. That single figure feeds her balance sheet and, via the change in stock, her taxable profit. Because she documented every adjustment, the number is defensible if HMRC ever asks.
What about stock in transit and goods abroad?
Goods you own at the year-end count, wherever they sit. The test is ownership and risk, not which warehouse they're in.
That means stock on the water from your supplier, stock in an inbound shipment to Amazon, and stock parked in your own garage all form part of closing stock if you owned it on your year-end date. The Inventory Ledger only captures what's inside Amazon's network, so you add these other pots separately.
If you use Amazon's European or wider programmes, your stock can be physically held in fulfilment centres in other countries. For your UK accounts you still value all of it and convert to sterling, but the location is what drives the VAT position, which is the next thing to get right.
What VAT and reporting rules come with FBA storage?
Storing stock somewhere usually creates a VAT presence there, and storing it via a marketplace pulls in extra rules. Here's how the main ones map to FBA sellers.
If your business is UK-established and you store and sell UK stock through Amazon, the normal UK VAT rules apply: you charge UK VAT once you're registered, and the £90,000 registration threshold (current from 1 April 2024) is the trigger to watch, with the standard rate at 20%.
The wrinkles come from the marketplace and from cross-border storage:
| Situation | Who accounts for the VAT, and the key rule |
|---|---|
| Overseas seller, goods already in the UK at point of sale, sold via the marketplace | The online marketplace accounts for the UK VAT. The seller makes a zero-rated "deemed supply" to the marketplace. No value threshold applies. |
| Goods outside the UK, value £135 or less, sold direct (not via a marketplace) | UK supply VAT is due at the point of sale, accounted for by the seller. The £135 is the total consignment value, not per item. |
| You store goods in a UK fulfilment house as an overseas seller | The fulfilment business must be approved under the Fulfilment House Due Diligence Scheme and keep records on your goods. |
| You move stock from Northern Ireland to EU consumers | You may need to account for EU VAT once distance sales pass the EU-wide threshold, and can use the One Stop Shop to report it. |
Two extra points FBA sellers ask about constantly:
- Holding stock in another country. If Amazon stores your goods in, say, an EU fulfilment centre, that country can require you to register for VAT there from the first sale, separate from your UK position. The €10,000 EU-wide distance selling threshold applies to cross-border B2C sales, not to stock you already hold abroad.
- Marketplace reporting to HMRC. Under the reporting rules for digital platforms, in force from 1 January 2024, platforms like Amazon report seller details and income to HMRC, with the first reports due in January 2025. There's a de minimis: a platform need not report a seller making fewer than 30 sales of goods and receiving 2,000 euros or less (roughly £1,700) in a year. This doesn't create a new tax for you, but it means HMRC sees your marketplace income, so your declared figures need to match.
Getting the VAT location right matters as much as the stock count itself. If you're unsure where you have a registration obligation, that's worth a conversation before year-end, not after. You can read more about how we support sellers on our Amazon FBA accounting page.
FAQs
Do I need a physical stock count for FBA?
No, and you can't do one inside Amazon's warehouses. You take a snapshot from the FBA Inventory Ledger on your year-end date and reconcile it to your own records, then value it. Keep the dated report as evidence.
Which Amazon report should I use for year-end stock?
The FBA Inventory Ledger summary report. It works like a bank statement for your inventory, showing opening balance, receipts, sales, returns, adjustments and the closing balance, which is what makes it reconcilable.
How do I value stock that's sitting in Amazon's warehouse?
At the lower of cost and net realisable value, under FRS 102 Section 13. Cost is the purchase price plus the cost of getting goods to Amazon. Net realisable value is the estimated selling price less the FBA and referral fees needed to sell it.
Do lost or damaged FBA units count as closing stock?
No. Units Amazon has lost or damaged and not yet reimbursed are a reimbursement claim, not sellable stock, so you exclude them from the count. Include them in stock only if and when they're reinstated.
Does storing stock in Amazon's EU warehouses affect my VAT?
It can. Holding stock in another country often triggers a VAT registration obligation there from your first local sale, separate from your UK VAT position. Where you store goods drives the VAT outcome, so check it before you send stock abroad.
Does Amazon report my sales to HMRC?
Yes. Under the reporting rules for digital platforms in force from 1 January 2024, marketplaces report seller details and income to HMRC, subject to a small de minimis for very low-volume sellers. Make sure the figures you declare match.
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Get your FBA year-end right
Reconciling FBA inventory, valuing it correctly and keeping the VAT position clean is fiddly, and it's exactly the kind of work that's easy to get wrong at speed. If you'd like an accountant who knows the FBA reports and the rules behind them, book a free call with Zmartly and we'll handle your year-end stock and statutory accounts properly.
