The short answer
No — you do not need a limited company to sell on Etsy, eBay or Amazon. All three marketplaces let you start as a sole trader, and for most new sellers that is the right call. Register one when your sales grow, when you want your personal money protected, or when the tax maths tips in the company’s favour — usually once profits pass roughly £30,000 to £50,000 a year, or when you start leaving profit in the business.
This guide shows what each marketplace asks for, the five signs it is time to incorporate, what it costs in 2026, the five steps to register, and a worked £ example of the real tax difference.
Do Etsy, eBay or Amazon require a limited company?
None of them do. You can open a seller account on all three as an individual, which in UK tax terms means a sole trader. You still have to tell HMRC about your income — marketplaces now share seller income details with HMRC — but no marketplace will force you to incorporate.
| Marketplace | Can you sell as a sole trader? | What they ask for |
|---|---|---|
| Etsy | Yes — most UK Etsy shops start this way | Identity, bank account and tax details as sales grow |
| eBay | Yes — a personal account works to start | Bank details for managed payments; a business seller account if you sell regularly for profit |
| Amazon | Yes — the Individual plan is built for sole traders | Identity and business information, plus tax details; a VAT number only if VAT-registered |
The fees are separate from the company question. On Amazon, the Individual plan costs 75p per item sold, while the Professional plan costs £25 a month excluding VAT, plus referral fees of mostly 8–15% on every sale, at the time of writing. Etsy and eBay charge their own per-listing and per-sale fees — check each marketplace’s current fee page before you set your prices. None of these fees change because you register a company — but your tax bill does.
5 signs it’s time to register a limited company
1. Your profits are climbing past £30,000 a year. Below that level a sole trader usually pays less tax. Once profits grow, or you start leaving money in the business, the company’s 19% corporation tax beats 20% income tax plus 6% National Insurance on the same money.
2. You want to protect your personal money. As a sole trader, you and the business are the same person — if the business owes money, your personal savings are on the line. A limited company is a separate legal person, so your liability is generally limited to what you put in. That matters once you hold stock or take larger orders.
3. You want to look established. Wholesale suppliers, trade accounts and brand partnerships take a registered company more seriously than a sole trader. A Companies House listing and a business bank account make your shop look like a real business, not a hobby — and for women sellers building a brand from a spare room, that professional footing opens doors a personal account cannot.
4. You are taking on a partner or staff. Sharing ownership is far cleaner through company shares than an informal split, and hiring is simpler too — payroll, contracts and employer National Insurance are straightforward from the start.
5. You want to reinvest instead of taking everything out. A sole trader pays tax on all profit, spent or not. A company pays corporation tax, and you only pay personal tax on what you take out. If you plan to spend next year’s profits on stock or equipment, leaving that money inside the company is usually the cheapest way to fund it.
If none of these apply yet, stay a sole trader — you can always incorporate later, and registering too early just buys paperwork and a £50-a-year confirmation statement for no benefit.
What does it cost to register a limited company in 2026?
Registering is cheap and fast — the real costs are the yearly filings that follow.
| Route | Cost | How long it takes |
|---|---|---|
| Online with Companies House | £100 | Usually within 24 hours |
| By post (form IN01) | £124 | 8 to 10 days |
| Through an agent or accountant | £100 plus their fee | Usually within 24 hours |
After that, budget for the yearly running costs: a £50 confirmation statement, accounts for Companies House and a Corporation Tax return for HMRC. An accountant charges a few hundred pounds a year — worth it in year one, when one missed deadline costs more.
How to register a limited company to sell online in 5 steps
Step 1 — Verify your identity. Verify your identity through GOV.UK One Login before you register — you receive a personal code, and each director needs their own.
Step 2 — Pick a name and your people. Choose a company name Companies House will accept — it must not match an existing name, and sensitive words need approval. Then decide your directors (at least one, aged 16 or over), shareholders and people with significant control — anyone holding more than 25% of the shares or voting rights.
Step 3 — Set a registered office address. This is the company’s official address on the public register. Your home address works, but anyone can look it up — many sellers use an accountant’s address or a registered office service.
Step 4 — File online and pay £100. Use the Companies House online service to register your company with Companies House. You will usually be registered within 24 hours, receive a certificate of incorporation, and be set up for Corporation Tax at the same time, unless the company is dormant.
Step 5 — Sort the money side. When your 10-digit Unique Taxpayer Reference arrives, add Corporation Tax services to your business tax account. Open a separate business bank account, and update the tax and business details on your Etsy, eBay and Amazon seller accounts. Our step-by-step guide to how to register a limited company in the UK has the full checklist.
Worked £ example: Maya’s Etsy candle shop (£28,000 profit)
Maya sells handmade candles on Etsy. Last year she made £40,000 in sales and spent £12,000 on wax, jars, packaging and postage, leaving £28,000 profit, all of which she takes out of the business. Which costs her less in 2026/27?
As a sole trader: her £12,570 personal allowance comes off first, leaving £15,430 taxable. Income tax at 20% is £3,086, and Class 4 National Insurance at 6% is £925.80. Total tax: £4,011.80. She keeps £23,988.20.
As a limited company: she pays herself the £12,570 salary, which uses her personal allowance exactly, so no income tax or employee National Insurance. The company pays 15% employer National Insurance on the salary above £5,000 — £1,135.50 — leaving company profit of £14,294.50. Corporation tax at 19% is £2,715.96, leaving £11,578.54 to take as dividends, and dividend tax at 10.75% above the £500 allowance is £1,190.94. Total tax: £5,042.40. She keeps £22,957.60.
| Sole trader | Limited company | |
|---|---|---|
| Income tax | £3,086.00 | £0 (salary covered by allowance) |
| National Insurance | £925.80 (Class 4) | £1,135.50 (employer NIC) |
| Corporation tax | — | £2,715.96 |
| Dividend tax | — | £1,190.94 |
| Total tax | £4,011.80 | £5,042.40 |
At £28,000 profit the sole trader wins by £1,030.60, because the director is taxed three times: employer National Insurance, corporation tax, then dividend tax. But change one assumption and the answer flips: if Maya leaves £10,000 of that profit in the company to buy stock, it only pays 19% corporation tax — £1,900 — instead of 20% income tax plus 6% National Insurance as a sole trader. The company wins when you keep money in the business, not when you take it all out. These figures are simplified for 2026/27 for a one-director company, so the £10,500 Employment Allowance does not apply — ask an accountant to run your exact numbers.
Sole trader vs limited company for marketplace sellers
| Sole trader | Limited company | |
|---|---|---|
| Tax on profit | Income tax 20% / 40% / 45% plus Class 4 National Insurance | Corporation tax 19% to £50,000, 25% above £250,000, then tax on what you take out |
| Your money at risk | Unlimited — personal assets are exposed | Limited — the company is a separate legal person |
| Paperwork | One Self Assessment return a year | Confirmation statement (£50), company accounts, Corporation Tax return |
| Paying yourself | Take what you like, whenever | Salary plus dividends |
| VAT | £90,000 threshold either way | £90,000 threshold either way |
| Best for | Starting out, testing an idea, profits under roughly £30,000 | Growing sales, holding stock, hiring, reinvesting profit |
4 mistakes to avoid when you register
Registering before your first sale. A company with no sales still needs a confirmation statement, accounts and a tax return. Wait until sales prove the idea, then incorporate — online registration takes about a day.
Using your home address without thinking. Your registered office address is public. If you sell from home and want to keep your street address private, use an accountant’s address or a registered office service.
Forgetting the £50 confirmation statement. Every company must file one each year, within 14 days of the anniversary of incorporation. Miss it and Companies House can fine you — and eventually strike the company off.
Mixing business and personal money. Open the business bank account the week you register, and route every marketplace payout through it. Clean books make your first Self Assessment or company accounts painless — and marketplaces share seller income details with HMRC, so there is no hiding a growing shop from the taxman anyway.
FAQs
Do I need a limited company to sell on Etsy in the UK?
No. You can open an Etsy shop as an individual and trade as a sole trader. Register a limited company when your profits grow, when you want limited liability, or when you plan to leave profit in the business to reinvest.
Can I sell on Amazon as a sole trader?
Yes. Amazon’s Individual plan is designed for sole traders and charges 75p per item sold, with no monthly fee. The Professional plan at £25 a month excluding VAT suits sellers doing more than about 35 sales a month.
How much does it cost to register a limited company in 2026?
It costs £100 to register online with Companies House, and your company is usually registered within 24 hours. Registering by post costs £124 and takes 8 to 10 days. After that, budget £50 a year for the confirmation statement.
Should I register a limited company before my first sale?
Usually not. Start as a sole trader, prove people want what you sell, and incorporate once sales are steady. Registering early buys you filings and fees before you have any income to justify them.
Conclusion
You do not need a limited company to sell on Etsy, eBay or Amazon — a sole trader account gets you selling today, and under roughly £30,000 profit it usually costs less tax too. Register when your sales grow, when stock and liability start to matter, or when you want to leave profit in the business. At £100 online and about a day to register, it is one of the cheapest upgrades a marketplace seller can make.
