Every fortnight Amazon sends you money, and every fortnight that number is smaller than what you sold — fees, refunds, storage and sometimes a reserve, all netted off before the cash moves. HMRC doesn't tax the number in your bank. It taxes the business behind it — and since 2024, Amazon tells HMRC what that business sold.Here's how to read the gap before it reads you.
Say a settlement period carries £10,000 of sales. By the time the disbursement lands, Amazon has deducted its referral fee on each sale, FBA fulfilment fees per unit, storage, and netted off any refunds — and may be holding part of your balance in reserve. What arrives might be £6,900. (Illustrative round numbers — your fee mix is your own; the shapeis every FBA seller's.)
The £6,900 is real money. But it is not your turnover, not your sales, and not the number any tax rule cares about. It's an after— after fees that are actually business expenses, after refunds that are actually reversed sales, after timing quirks that belong to Amazon's calendar rather than yours.
The FBA version of this problem is worse than most platforms', because the deductions are bigger. A Shopify seller's payout runs a few percent behind sales; we've written about that gap too — but an FBA seller's bank can trail sales by 30% or more. The blind spot scales with the fee bill.
Registration is measured on taxable turnover — what you sell, plus any services you buy from overseas that you have to reverse-charge — at £90,000 over any rolling 12 months (plus a forward test: expecting to cross £90,000 in the next 30 days alone). A seller banking £75,000 of payouts can be past £90,000 of sales and already be legally required to register.
Turnover means gross sales; Amazon's fees are expenses set against it. Declare the net payout as income and your profit may survive, but your turnover is understated — the top line of your return is simply wrong.
Since 1 January 2024, platforms report sellers' income to HMRC every January — and give you a copy. HMRC can put Amazon's figure next to your return. If your books were built from bank payouts, those two numbers disagree, and you won't be the one who spots it first.
Notice what all three have in common: not one of them can be answered from your bank statement.
Everything you need is already in Seller Central — the settlement and date-range payment reports break every disbursement back into its parts. The discipline is simply to book those parts, not the total:
Gross sales go in as turnover. Refunds reduce it. Referral, fulfilment and storage fees are expenses. Advertising is an expense. A reserveisn't a cost at all — it's your money still sitting at Amazon, and booking it as anything else quietly distorts both profit and turnover. Do that for each settlement and your books reconcile to the penny; your true margin per product finally becomes visible; and the VAT threshold stops being a surprise waiting to happen.
Then watch the right number: your rolling 12-month sales, all channels pooled — Amazon, your own site, eBay, the lot. That's the figure the threshold reads, and the window moves every month.
Cross the £90,000 line without noticing and the VAT is due from the date you should have registered— VAT you never charged your customers, paid out of your own margin, on top of a failure-to-notify penalty. For an FBA business running 20–30% net margins, a year of unnoticed liability can be most of a year's profit.
And the era when nobody was checking is over: the figures needed to catch it are now filed with HMRC every January, by Amazon, about you.
Pull a date-range report for the last 12 months and read the gross sales line — that's the number HMRC's rules see, and the one Amazon reports. If it's anywhere near £90,000 (adding your other channels), get your position checked properly before the rolling window does it for you. And if your books have been built from bank payouts, fix the basis now — it's a known, mechanical job, and it gets bigger every settlement you leave it.
Your sales. VAT registration is measured on taxable turnover — the value of what you sell, plus any services you buy from overseas that you have to reverse-charge — and the threshold is £90,000 over any rolling 12 months, with a second test if you expect to cross £90,000 in the next 30 days alone. Amazon's disbursements arrive net of referral fees, fulfilment fees, storage, refunds and any reserve, so judging your position from the bank means judging it from a number that is systematically too low.
Yes. Under the digital platform reporting rules that started on 1 January 2024, platforms collect and verify sellers' details, report their income to HMRC every year by the following 31 January, and must give you a copy of what they reported. Very small sellers are excluded — fewer than 30 sales of goods and under roughly €2,000 (about £1,700) in a calendar year — but any serious FBA business is well past that.
Yes — referral fees, FBA fulfilment and storage fees, advertising and the cost of your stock are allowable business expenses, deducted from turnover to reach your taxable profit. But deduct them as expenses in your books; don't shortcut by declaring the net payout as your income. The profit can come out the same, yet your declared turnover is wrong — and it won't match what Amazon has told HMRC you sold.
In Seller Central's reports — the settlement and date-range payment reports break each payout into gross sales, fees, refunds and adjustments. Your bank statement only ever shows the final line. Books built from the reports reconcile to the penny; books built from the bank are guesswork wearing a spreadsheet.
Yes. The VAT threshold applies to your business's total taxable turnover, not per channel — Amazon, Shopify, eBay and your own site all pool into the same £90,000. Sellers watching each channel separately can be over the threshold while every individual channel looks comfortably under it.
Send us a couple of settlement reports and we'll show you your real sales, your real margin, and exactly where you stand against the VAT threshold — plainly, with no obligation.
Book a free call →General guidance, not advice for your specific situation — and the settlement walk-through is illustrative, not a quote of Amazon's fee schedule. Last reviewed 14-07-2026.
We checked these rather than relying on memory. Every figure and deadline above comes from HMRC directly — go and read them yourself if you'd like to.
Last reviewed 14-07-2026. Tax rules change — if you're reading this long after that date, check the source.
