That's your own website, Amazon, Shopify, Etsy, eBay, or any other platform combined — at which point you must register with HMRC within 30 days. Below that threshold, registration is optional. Above it, it's compulsory, and the rules are the same whether you're selling handmade goods on Etsy or running a multi-channel Shopify store. This guide walks through registration, thresholds, and what your VAT returns will actually involve once you're in the system.
When Do Online Sellers Need to Register for VAT?
The threshold isn't per platform — it's your total taxable turnover added together across every channel you sell through. A seller doing £50,000 on Amazon and £45,000 on their own Shopify site has crossed £90,000 combined, even though neither channel alone looks close to the threshold. This is the single most common way online sellers get caught out: monitoring each platform separately instead of tracking the rolling total across all of them.
Once you cross £90,000, you have 30 days to notify HMRC and register. There's no grace period beyond that window — VAT becomes due on your sales from the effective registration date regardless of whether you've actually registered yet, which is why sellers who register late often end up owing backdated VAT they didn't collect from customers at the time.
Do I Need to Register If I'm Below the Threshold?
Not legally, but voluntary registration is worth considering in a few situations. If most of your customers are VAT-registered businesses rather than consumers, they can reclaim the VAT you charge, so registering doesn't make your prices less competitive — and it lets you reclaim VAT on your own costs, like stock, packaging or software. If you're a small consumer-facing seller, though, voluntary registration usually just adds 20% to your prices without a matching benefit, so it's rarely worth doing early in that case.
How Does VAT Work Differently for Amazon, Shopify and Etsy Sellers?
Each platform handles VAT slightly differently, which is part of why VAT for online sellers feels more complicated than VAT for a typical small business:
- Marketplaces sometimes collect VAT on your behalf, particularly on sales to overseas customers or from overseas sellers, but this doesn't remove your own registration obligation on UK-to-UK sales once you're over the threshold.
- HMRC receives seller data directly from marketplaces, so turnover that isn't showing up in your own records can still be visible to HMRC — this makes "I didn't realise I'd crossed the threshold" a much weaker position than it used to be.
- Overseas sellers storing stock in the UK, including via Amazon FBA, face a £0 threshold — registration is required from the very first UK sale, with none of the £90,000 headroom UK-based sellers get.
What Does a VAT Return Actually Involve?
Once registered, VAT returns are typically filed quarterly. Since Making Tax Digital for VAT is mandatory, you can't manually key figures into HMRC's portal — your accounting software needs to receive sales data directly, usually through an integration with your selling platforms rather than manual re-entry each quarter. A VAT return reports the total VAT charged on your sales (output VAT), the total VAT paid on business purchases and expenses (input VAT), and the difference between the two, which is either paid to HMRC or reclaimed from HMRC. For online sellers, the main practical challenge is usually getting sales data out of multiple platforms and into one place cleanly, since each marketplace exports its data slightly differently, and VAT treatment can vary depending on where the customer is based.
What Happens If I Register Late?
Late registration means backdated VAT on all sales from the date you should have registered, plus penalties calculated on how late you were and how much VAT was involved. Because the marketplace data HMRC receives makes it straightforward to identify sellers who've crossed the threshold without registering, this is an increasingly common area of HMRC enforcement rather than a theoretical risk.
Can I Deregister If My Sales Drop?
Yes — if your taxable turnover falls below £88,000, the deregistration threshold set slightly lower than the £90,000 registration threshold to avoid sellers flipping in and out of VAT registration around a single figure, you can apply to deregister. Crossing below £90,000 alone isn't enough; it needs to fall below £88,000 specifically.
Frequently Asked Questions
The VAT registration threshold is £90,000 in taxable turnover within any rolling 12-month period, combined across all sales channels — not per platform.
No. All UK sales across every platform count toward a single £90,000 threshold. You register once, and it covers your total turnover regardless of how many channels you sell through.
Most VAT-registered businesses, including online sellers, file quarterly returns under Making Tax Digital for VAT, which requires digital record-keeping and software-based submission rather than manual entry.
You'll owe backdated VAT on sales from the date you should have registered, plus penalties based on how late the registration was and how much VAT is involved.
Getting VAT right as an online seller. If you're approaching the threshold or already juggling VAT across multiple sales channels, our VAT Returns service can set up the reporting and filing so nothing falls through the cracks between platforms.
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