Your accountant has asked for "the Shopify reports", and the Analytics menu has dozens of them. Which ones actually matter, and which numbers do they need to file your VAT return and accounts correctly?
This is a practical, UK-specific walk-through. You'll learn which Shopify reports your accountant relies on, why your Shopify payout never matches your sales total, and how to hand over a clean export every quarter so nothing gets missed.
It's written for UK Shopify sellers, whether you're under the VAT threshold or already registered. We'll keep the tax rules accurate and link every figure to its gov.uk source.
Which Shopify reports does your accountant actually need?
In short: the Finance Summary, the Sales reports, the Taxes report, and your Shopify Payments payout export. Together these reconcile what you sold, what tax you collected, and what actually landed in your bank.
Everything else in Analytics is useful for running the shop, but those four are what turn into your bookkeeping and your VAT return.
Let's go through each, what it shows, and the trap to avoid.
Why doesn't my Shopify payout match my sales?
This is the single most common point of confusion, so it's worth nailing first.
The money Shopify Payments deposits in your bank is not your sales figure. It's your sales, minus refunds, minus Shopify's processing fees, minus any chargebacks, plus or minus a few timing adjustments. Payouts also straddle the month end, so a sale on 31 March can land in your April payout.
For your books and your VAT return, your accountant needs gross sales, not the net payout. The payout is only used to reconcile to the bank.
So you give them two things: the sales numbers (what you sold and the VAT on it) and the payout numbers (what hit the bank, and the fees deducted). The Finance Summary ties those together.
What's in the Shopify Finance Summary?
The Finance Summary (under Analytics, then Reports, then Finances) is the closest thing Shopify has to a one-page profit picture for a period. It breaks down:
- Gross sales before discounts and returns.
- Discounts and returns, which reduce gross to net.
- Net sales, the figure most of your bookkeeping starts from.
- Shipping charged to customers.
- Tax collected (VAT, for UK sellers).
- Total sales, which is net sales plus shipping plus tax.
- Payments and fees, reconciling to your payouts.
The detail behind each line lives in the linked Sales and Payments reports. For bookkeeping you want gross sales, discounts, returns, shipping income and the fees as separate lines, because they post to different places in your accounts. Lumping them into one "Shopify income" figure is where margins get lost.
One practical note. Shopify fees are a cost of sale, and if you're VAT registered, the VAT treatment of those fees matters (see the cross-border section below). Keep them visible, never netted off your sales.
How do I read the Shopify Taxes report for VAT?
If you're VAT registered, the Taxes report (under Analytics, then Reports) is the one your accountant will scrutinise. It shows the tax collected on your orders, broken down by region and rate.
For a UK seller charging standard-rate VAT, the rate is 20% for 2025/26 (gov.uk VAT rates). Some products are reduced-rated at 5% or zero-rated at 0%, so if you sell, say, children's clothing or most food, check that Shopify is applying the right rate per product rather than blanket 20%.
The Taxes report should reconcile to box 1 of your VAT return (VAT due on sales). The catch is that Shopify reports VAT collected, which is your output tax. Your accountant then adds the input tax you can reclaim (on stock, fees and overheads) to work out what you actually pay.
A quick reconciliation worth doing every quarter:
| Check | Where it comes from | Why it matters |
|---|---|---|
| VAT collected matches net sales x rate | Taxes report vs Sales report | Catches products set to the wrong VAT rate |
| Refunded VAT is included | Taxes report (negative lines) | Refunds reduce your output VAT |
| Zero-rated and exempt sales are separate | Taxes report by rate | These still go in box 6, not box 1 |
| Sales to non-UK customers | Taxes report by region | Different rules apply (see below) |
If your VAT-registered turnover is the question, the current UK VAT registration threshold is £90,000 of taxable turnover, in force since 1 April 2024 (gov.uk VAT registration thresholds). It's a rolling 12-month test, not a tax-year one, so your Shopify sales reports are exactly what you watch to see if you're approaching it.
Remember that all VAT-registered businesses must keep digital records and file through MTD-compatible software (gov.uk Making Tax Digital for VAT). Shopify itself is not the filing software, so your figures need to flow into bookkeeping software that is.
What does Shopify report to HMRC about me?
Here's a distinction that trips a lot of sellers up, and it's good news for Shopify store owners.
The Reporting Rules for Digital Platforms require certain platforms to send HMRC information about their sellers' income, with the first reports due by 31 January 2025 for the 2024 calendar year (gov.uk reporting rules for digital platforms). Platforms in scope must also give each reportable seller a copy of the information by 31 January following the reporting period (gov.uk: digital platform seller information).
But those rules apply to platforms that facilitate sales between sellers and buyers, the marketplace model. A self-hosted Shopify store, where you sell direct to your own customers, is generally not that kind of platform. So unlike a marketplace seller, you typically won't get a platform report landing on HMRC's desk for your Shopify shop.
That cuts both ways. It means HMRC isn't being handed your Shopify turnover automatically, which makes your own record-keeping the only version of the truth. Get the reports right, because nobody else is reporting them for you.
It's a different story if you also sell through a marketplace, or if you use Shopify's marketplace integrations. Those marketplace sales can be reported, and a marketplace can even become the deemed supplier for VAT on certain sales (more on that next).
How do cross-border sales change the numbers?
Once you ship abroad or use overseas fulfilment, three rules start to bite. Your accountant needs the data split out so they can apply them.
Imports of low-value goods into the UK (the £135 rule). Where goods are sold to a UK customer in a consignment valued at £135 or less and the goods are outside the UK at the point of sale, UK supply VAT is charged at the point of sale rather than as import VAT (gov.uk: overseas goods sold directly to UK customers). The £135 is the value of the whole consignment, not each item.
The deemed-supplier rule for marketplaces. If those same low-value goods are sold through an online marketplace, the marketplace, not you, accounts for the UK VAT at the point of sale. The same applies to goods already in the UK that an overseas seller sells through a marketplace (gov.uk: overseas goods sold via online marketplaces). Your own Shopify store is not a marketplace, so this deemed-supplier rule does not move the VAT off you for direct Shopify sales. That's why mixing marketplace and Shopify sales in one figure causes errors.
Selling to EU consumers. If you ship low-value goods (consignments not exceeding €150, broadly £135) from Great Britain to EU consumers, you can use the EU's Import One Stop Shop (IOSS) to charge and report EU VAT through a single return, using an intermediary (gov.uk: register for the VAT Import One Stop Shop). If you sell digital services to EU consumers, there's no de minimis threshold, you account for EU VAT from the first sale, typically via the non-Union One Stop Shop in an EU member state (gov.uk: VAT on digital services to EU consumers).
The takeaway for your reports: tag or filter your Shopify sales by destination and by whether they went through a marketplace. A region breakdown your accountant can read is worth far more than a single total.
Should I use the VAT Flat Rate Scheme as a Shopify seller?
The Flat Rate Scheme (FRS) lets you pay a fixed percentage of your gross, VAT-inclusive turnover instead of tracking input VAT on every purchase. You can join if you expect taxable turnover (excluding VAT) of no more than £150,000 in the next 12 months, and you must leave once total income including VAT exceeds £230,000 at your anniversary (gov.uk: Flat Rate Scheme, VAT Notice 733).
The trap for product sellers is the limited cost business test. If your spend on relevant goods is less than 2% of your flat-rate turnover, or more than 2% but under £1,000 a year, you must use the 16.5% rate regardless of sector (VAT Notice 733). At 16.5% of gross turnover, the FRS is almost always worse than standard VAT accounting, so most Shopify sellers with real stock costs use the standard method.
Illustrative example: standard VAT vs the Flat Rate Scheme
This is a worked example with made-up figures to show the mechanics. It is not a real client.
Priya runs a homeware Shopify store and is VAT registered. In a quarter she has gross, VAT-inclusive sales of £30,000 (all standard-rated at 20%), and she buys £9,000 of stock and pays £900 of Shopify and overhead costs, both VAT inclusive.
Standard method. Her gross sales of £30,000 contain £5,000 of output VAT (£30,000 / 6, because 20% VAT is one sixth of a VAT-inclusive total). Her £9,000 of stock contains £1,500 of input VAT, and her £900 of costs contains £150. So she pays £5,000 minus £1,500 minus £150, which is £3,350.
Flat Rate Scheme, retail sector. "Retailing that is not listed elsewhere" carries a 7.5% flat rate (gov.uk FRS percentages, FRS7300). She'd pay 7.5% of the £30,000 gross, which is £2,250. (A first-year 1% discount can apply but is ignored here.)
Limited cost business. If instead her relevant goods spend were under 2% of turnover, she'd be forced onto 16.5%, paying 16.5% of £30,000, which is £4,950, well above the standard method's £3,350.
So the answer is "it depends, and the maths flips fast". With healthy stock costs the FRS can win; if your goods spend is thin, it can cost you more. Always model it on your own numbers before opting in.
Which export should I send my accountant each quarter?
Here's the clean handover that saves everyone time. Each VAT quarter (or each month if you prefer), export and send:
- Finance Summary for the period, as your one-page overview.
- Sales report broken down by product or by sales channel, showing gross sales, discounts and returns.
- Taxes report by region and rate, so VAT reconciles to your return.
- Payouts export from Shopify Payments, showing gross, fees and net, to reconcile to the bank.
- A note of any non-Shopify channels (marketplaces, in-person, wholesale) so nothing is double-counted or missed.
Match the report date range to your VAT period exactly, and use the order date basis your accountant agrees, not the payout date, so sales land in the right quarter.
If that already sounds like a faff, it's the part we take off your hands. Our work for Shopify sellers includes pulling these reports, reconciling payouts to the penny and filing MTD-compliant VAT returns, so you get a clean set of numbers instead of a folder of CSVs. If you'd rather hand the whole back office over, our bookkeeping service and VAT advisory connect your Shopify data straight into compliant software.
Want to know if the Flat Rate Scheme or standard VAT is better for your store? Book a free 20-minute call with a Zmartly accountant and we'll model both on your real Shopify numbers.
Frequently asked questions
Does Shopify file my VAT return for me?
No. Shopify reports the VAT you collected, but it is not MTD-compatible filing software. Your figures need to flow into bookkeeping software that can submit to HMRC under Making Tax Digital, which is mandatory for all VAT-registered businesses.
Why is my Shopify payout lower than my sales?
Because a payout is your sales minus refunds, processing fees and any chargebacks, with timing differences around month end. For your books and VAT you use gross sales, and the payout is only used to reconcile to your bank.
Which Shopify report shows the VAT I've collected?
The Taxes report, under Analytics then Reports. It breaks tax down by region and rate. For a UK standard-rated sale that's 20% for 2025/26, and it should reconcile to box 1 of your VAT return after refunds.
Does Shopify report my income to HMRC?
Generally no. The Reporting Rules for Digital Platforms target marketplaces that facilitate sales between sellers and buyers. A self-hosted Shopify store usually isn't in scope, so your own records are the only record of your turnover. If you also sell on a marketplace, that marketplace may report those sales.
What's the VAT registration threshold for a Shopify seller?
£90,000 of VAT taxable turnover, in force since 1 April 2024. It's a rolling 12-month test, so watch your trailing 12 months of Shopify sales rather than the tax year.
Should I put my Shopify fees and shipping in with sales?
No. Keep gross sales, discounts, returns, shipping income and Shopify fees as separate lines. Fees are a cost of sale, and netting them off hides your true margin and can distort your VAT figures.
