Ecommerce accountants: what online sellers need to know before Making Tax Digital hits £30,000 in April

What do online sellers need from ecommerce accountants before Making Tax Digital hits £30,000 in April?

Ecommerce accountants have told Newspage that online sellers need an accountant who “speaks fluent ecommerce”, and should “treat this year as your dress rehearsal”.

From 6 April 2027, Making Tax Digital for Income Tax will apply to sole traders and landlords with qualifying income over £30,000 in the 2025 to 2026 tax year, HMRC guidance shows.

Qualifying income is the amount before expenses, also known as turnover, so online sellers with strong sales and modest margins can be brought in even where their profit sits well below £30,000.

Those brought in will need to keep digital records, send HMRC quarterly updates and submit their tax return by 31 January the following year, all through compatible software.

One ecommerce accountant added that once systems are set up properly, quarterly updates become “a quick check rather than a crisis”.

What does an ecommerce accountant do?

An ecommerce accountant looks after the books and tax of businesses that sell online, through marketplaces such as Amazon, Etsy and eBay or their own Shopify or TikTok Shop store.

The job starts with turning platform payouts back into gross sales. The money that lands in a seller’s bank has already had fees, refunds, chargebacks and advertising costs taken off.

An ecommerce accountant records the full sales figure and claims those costs as expenses.

They connect sales channels and bank feeds to accounting software, reconcile the figures each quarter, track stock, and watch turnover against the £90,000 VAT registration threshold.

From April 2027, for sellers with qualifying income over £30,000, that also means sending HMRC quarterly updates under Making Tax Digital.

What should online sellers look for in ecommerce accountants?

Chloe Fallon, Founder and Director at Tamworth-based Lodestar Accounting, said online sellers should "look for someone who speaks fluent ecommerce".

She added: "Your accountant needs to understand how Amazon, Etsy, eBay, Shopify and TikTok Shop payouts actually work, because a payout is not your sales figure. Fees, refunds, chargebacks and advertising costs are all taken off before the money lands.

"Ask whether they use MTD-compatible software that connects directly to your sales channels, whether they've handled stock accounting and VAT for online sellers before, and how often they'll check in.

"The right accountant does more than file your returns. They guide you, stick with you, and help you see what's coming before it arrives."

How much does an ecommerce accountant cost?

Fees vary from firm to firm and will often depend on how a seller trades, rather than being a single price.

Factors such as the number of platforms, the volume of transactions, whether stock needs tracking, and whether the business is VAT registered or sells into the EU all affect the price.

Many accountants who work with online sellers charge a fixed monthly fee covering bookkeeping, quarterly updates and the annual tax return, rather than billing by the hour.

Sellers comparing quotes should check what is included: whether platform and bank feeds are connected for them, whether VAT returns are covered, and how often the accountant will check in.

The human touch can be important in the often fast-moving world of ecommerce.

With Making Tax Digital turning one annual return into four quarterly updates plus a final return, sellers should also ask whether the fee covers the extra filings from April 2027.

How can an accountant help with digital records and quarterly updates?

Sellers using Making Tax Digital send four quarterly updates a year, due by 7 August, 7 November, 7 February and 7 May, each showing totals for every income and expense category in their digital records, HMRC guidance shows.

Fallon added: "Making Tax Digital turns an annual scramble into a quarterly rhythm, and honestly, that's worth getting excited about.

"A good accountant sets up your systems once, properly: connecting your platforms and bank feeds, categorising transactions automatically, and reconciling each quarter so nothing builds up.

"Quarterly updates become a quick check rather than a crisis, and you get something genuinely useful in return: a regular, accurate view of how your business is really doing. That's when you stop reacting to your numbers and start owning them."

Do online platforms report your sales to HMRC?

Since 1 January 2024, digital platforms have had to collect sellers' details and report them, along with their income, to HMRC by the following January.

Fallon said online platforms now report sellers' details and sales data to HMRC every year, "so it's safest to assume HMRC can see your platform sales".

She added: "The key thing to understand is that platforms report gross figures, not profit, so the number HMRC sees may look very different from what you actually earned. If you're trading, your records need to tell the full story, and that story is yours to own.

"If you're simply clearing out your wardrobe, selling personal items you no longer need generally isn't taxable, but it's worth keeping a note so you can explain it if asked."

What are the most common tax mistakes online sellers make?

Sellers must register for VAT once their taxable turnover for the last 12 months goes over £90,000, or if they expect it to go over £90,000 in the next 30 days.

According to Fallon, the biggest mistake is "recording platform payouts as income instead of gross sales, which hides fees you're entitled to claim and creates mismatches with what platforms report".

She added: "Others we see often: mixing personal and business spending in one account, not tracking stock properly, forgetting about refunds and returns, and checking turnover too late.

"Sellers growing quickly can cross the £90,000 VAT registration threshold without realising, and selling into the EU brings its own VAT rules.

"We always remind clients that most of these mistakes come from good businesses being busy, not careless. Every one of them is fixable with the right setup and the right people in your corner."

How will Making Tax Digital affect smaller online sellers?

A further 1,077,000 sole traders and landlords with qualifying income between £30,000 and £50,000 will need to join Making Tax Digital in April 2027.

Fallon urged online sellers to get ahead of the change, saying: "The threshold dropping to £30,000 from April 2027 will bring a huge number of small online businesses into Making Tax Digital for the first time. It's based on qualifying income, meaning turnover, not profit, so plenty of sellers with modest margins will be caught.

"Our guidance is simple: don't wait. Start keeping digital records now, test the software, and treat this year as a dress rehearsal.

"Sellers who get ahead of it will find quarterly reporting gives them clearer, more confident decision-making, and a lot less dread. Those who leave it late will feel it."

Harvey Dhillon, Founder and CEO at London-based accountancy firm Zmartly, agreed that sellers should act now.

He said: "Before 31 January, work out your turnover from gross sales, not payouts, and file the return.

"If it's over the line [£30,000], get your software and records ready now, not in April."