VAT Registration for Online Sellers: Etsy, Amazon and Your Own Website (2026/27)
If you sell on Etsy, Amazon, eBay, TikTok Shop or your own website, you must register for VAT once your taxable turnover passes £90,000 in any rolling 12 months, or you expect it to pass £90,000 in the next 30 days alone. Every channel counts together, so no single shop needs to hit £90,000 on its own.
When Must an Online Seller Register for VAT?
There are two tests, and either one can trigger registration. The first is the backward look: at the end of each month, add up your taxable sales for the last 12 months. If that rolling total goes over £90,000, you must register within 30 days of the end of that month, and your registration takes effect from the first day of the second month after you crossed the line.
The second is the forward look: if you expect more than £90,000 of taxable sales in the next 30 days alone — a viral product, a big wholesale order, a Black Friday surge — you must register by the end of that 30-day period, with effect from the date you realised you would go over.
| Test | How it works | Deadline to register |
|---|---|---|
| Rolling 12 months (backward look) | Taxable turnover for the last 12 months goes over £90,000 | Within 30 days of the end of the month you went over |
| Next 30 days (forward look) | You expect over £90,000 of taxable turnover in the next 30 days alone | By the end of that 30-day period |
| Deregistration | Taxable turnover falls below £88,000 and you expect it to stay there | Apply to cancel; it is not automatic |
This is where online sellers most often slip up: the test is not your tax year or one marketplace’s dashboard, but a rolling window checked month by month. A quiet month drops out and a busy month drops in, so a seller who looked safe in October can cross the line in November.
What Counts Towards the £90,000?
Taxable turnover means the total value of your taxable sales — standard-rated, reduced-rated and zero-rated sales all count. It is turnover, not profit: a business with £95,000 of sales and £15,000 of profit must still register. And it is the price your customer paid, before marketplace fees are taken off. If a customer pays £50 for a handmade candle on Etsy, £50 counts towards your threshold, even if your payout after fees is much less.
Add every channel together: Etsy, Amazon, eBay, TikTok Shop, Vinted and your own website. Splitting sales across platforms does not keep you under the limit.
What does not count? VAT-exempt sales, such as most financial services and insurance, sales outside the scope of UK VAT, and sales of capital assets such as an old van. Most online sellers have few or none of these, so for most shops the practical rule is simple: add up everything you sold, before fees.
A worked example
Imagine Priya, who sells handmade jewellery from home. Over the last 12 months she made £38,000 on Etsy, £41,000 on Amazon and £19,000 through her own website. No single channel reaches £90,000 — but her total is £98,000, so she must register. If she crossed the line at the end of September, she must register by 30 October, and VAT applies from 1 November.
The price maths matters too. Once registered, a £120 candle set sold at the standard rate includes £20 of VAT (one sixth of the VAT-inclusive price), leaving £100 as the seller’s price before VAT. If Priya had been pricing as if the whole £120 were hers, registration suddenly takes a slice of every sale — which is why planning your prices before you cross the line is so important.
Do Marketplaces Handle VAT for You?
Partly, but not in a way that removes your own duty. Marketplaces have their own VAT responsibilities, particularly for overseas sellers and imported goods, and they may collect VAT on certain sales themselves. That does not replace the UK seller’s own registration test. If your own taxable turnover passes £90,000, you must register, add your VAT number to each of your seller accounts, and make sure your invoices and listings reflect your VAT status.
Once registered, check each platform’s tax settings: your VAT number should be on file and your bookkeeping should pull sales from every channel into one place.
Which VAT Rate Applies to What You Sell?
Most goods sold online are standard-rated at 20%, but not everything is. Some products are reduced-rated at 5% and some are zero-rated at 0% — and zero-rated sales still count towards your £90,000 threshold, even though you charge 0% VAT on them.
| VAT rate | Rate | Online-selling examples |
|---|---|---|
| Standard rate | 20% | Most clothing, jewellery, homeware, electronics and general goods |
| Reduced rate | 5% | Domestic fuel and power, children’s car seats, some energy-saving products |
| Zero rate | 0% | Most food, children’s clothing, books and newspapers |
| Exempt | No VAT charged, and you cannot reclaim input VAT | Insurance, most financial services, some education and health services |
Check the rate product by product rather than assuming your whole shop is 20%: a seller mixing children’s clothing (often zero-rated) with adult clothing (standard-rated) needs both rates in their bookkeeping.
What Changes Once You Are VAT Registered?
From your effective registration date, you must charge VAT on your taxable sales at the correct rate, issue VAT invoices to VAT-registered business customers, keep digital VAT records, and file VAT returns — usually every three months — using Making Tax Digital (MTD) compatible software. You must also pay any VAT you owe to HMRC by the deadline.
The upside is real: you can reclaim the VAT you paid on allowable business purchases — stock, packaging, marketplace fees that carry VAT, advertising and equipment — provided you hold valid VAT invoices. Keep records for at least six years, and keep them digital from day one.
Most sellers start on standard accounting, charging actual VAT and reclaiming input VAT. The Flat Rate Scheme, open to businesses with taxable turnover of £150,000 or less, lets you pay a fixed percentage of turnover instead — simpler, but you generally cannot reclaim input VAT except on large capital assets.
Should You Register Voluntarily, Before £90,000?
You can choose to register below the threshold, and for some sellers it pays off. If your customers are mainly VAT-registered businesses, they can reclaim the VAT you charge, so it costs them nothing extra — while you gain the ability to reclaim VAT on your own costs. Voluntary registration can also make a growing shop look more established to wholesale buyers.
It works less well if you sell mainly to consumers who cannot reclaim VAT: adding 20% to your prices, or absorbing it from your margin, can lose sales against unregistered competitors. Model both versions of your prices before registering early.
Your 5-Step Checklist When You Cross the Line
- Confirm the month you crossed. Add up the last 12 months of taxable sales from every channel, gross before fees, at month end.
- Register within 30 days. Register online through GOV.UK with your Government Gateway account, and note your effective registration date.
- Add your VAT number everywhere. Update Etsy, Amazon, eBay and your own website, and check that invoices show it correctly.
- Fix your prices and bookkeeping. Decide whether to add VAT on top or absorb it, and set up MTD-compatible software before your first return is due.
- Tell your accountant early. A quick conversation before registration is far cheaper than untangling a late registration, backdated VAT and a penalty afterwards.
If you have already gone over the threshold without registering, register now, work out the VAT due from the date you should have registered, and tell HMRC yourself — an unprompted disclosure generally means a lower penalty.
Frequently Asked Questions
Q: Do I add up sales from all my shops, or is each shop separate? A: You add them all up. The £90,000 test applies to your business as a whole, across Etsy, Amazon, eBay, your own website and every other channel combined.
Q: Does the £90,000 mean profit or total sales? A: Total taxable sales, before costs and before marketplace fees. Profit is irrelevant to the test — a low-margin seller with £95,000 of sales must still register.
Q: Do zero-rated sales count towards the threshold? A: Yes. Zero-rated sales count towards the £90,000 even though you charge 0% VAT on them. Exempt sales do not count, but most online sellers have very few of those.
Q: Can I deregister if my sales fall again? A: Yes, if your taxable turnover falls below £88,000 and you expect it to stay below that level. You apply to cancel — deregistration is not automatic — and you may owe final VAT on stock and assets on hand.
Conclusion
VAT registration for online sellers is not about any one marketplace — it is about your whole business, added up month by month, gross before fees. Track your rolling 12-month total across every channel, know the £90,000 line before you reach it, and plan your prices for the day VAT applies. Sellers who do that cross the threshold as a milestone; sellers who do not discover it as a backdated bill. If your sales are climbing towards £90,000, start your bookkeeping, pricing and registration plan now — and read our full guide to VAT registration for the threshold and rates in one place. For the official registration route, see GOV.UK’s Register for VAT guidance.
