eCommerce Accounting, Accountants for Amazon sellers, eBay sellers and online traders

Specialist eCommerce Accounting For Online Resellers

We’re proud to offer bespoke eCommerce accounting solutions for eBay, Amazon, Shopify, Etsy (and other platform) retailers.  Hanley & Co understands the needs of online resellers and can provide clear-cut advice to help your business run smoothly.  From providing bookkeeping services, MTD compliant bookkeeping systems, important VAT planning advice, year-end accounts, advising you on tax relief opportunities available to your business and more, you can trust Hanley & Co to free up time that you could be putting into growing your business.

Why You Can Trust Us

It’s an exciting time to be an online retailer, with more people than ever turning to the internet for their shopping. Choosing an accountant that knows how your industry operates is essential, and with experience of working with a wide range of online merchants, you can be sure that we can take the stress of accounting off your hands.  So if you’re on the hunt for accountants offering accounting for Amazon sellers, or are an online retailer that requires fuss-free eCommerce accounting, get in touch with Hanley & Co for a free initial consultation.

Call us today on:

01253 320018 (Blackpool)

0161 339 7502 (Manchester)

…or send over an email at help@hanleyandco.co.uk.

eCommerce Accountants – Hanley & Co

Accounting For Amazon Sellers & Online Retailers – Our Services

You’re in good hands with Hanley & Co, because we understand that accounting for Amazon sellers is a bit different compared to other industries. Our eBay and amazon accountant specialists know what it takes to provide business advice, clear VAT advice and accounting solutions that actually work.

At a glance, some of the services we provide for online resellers include:

• Talking your lingo – for example, we understand your site charges, Paypal fees and margins structures and also your warehousing choices – back-bedroom, own storage or Fulfilled By Amazon (FBA). In other words, you won’t need to ‘translate’ for us, before asking our advice.
• Recommending the right business structure for you – to maximise profits and minimise your tax liabilities.
• Advise you how to deal with the VAT thresholds (if applicable) and the various schemes available to you.  Explain how sales in the EU are considered for VAT purposes – and your options as you grow your online business.
• Offering you a full in-house bookkeeping service, or, if you prefer to do your own bookkeeping, we will provide training on a bespoke manual bookkeeping system or award-winning Kashflow online MTD compliant software to make your job easier
• Help you to correctly classify all your purchases during the year and value your stock at the end of the year – from stock to stationery and computers – to maximise taxable expenses and capital allowance claims.
• Take the hassle out of your staffing arrangements by operating a PAYE scheme on your behalf for any employees (remember there is no such thing as a ‘casual worker’ anymore!)
• Advise about tax relief on working from home costs you incur.
• Help you re-organise personal loans and mortgages as business loans, maximising tax relief on the interest.
• Plan your accounts period end around your ‘quiet season’ if necessary, so you can minimise admin and instead concentrate on running your business when you need to.
• Advise how to draw money from your business in the most tax efficient way possible.
• Charge you reasonable fees for your eCommerce accounting based on the time we spend (no unfair fixed fees!)

Jargon-free Services & Advice From The Experts

Accounting for Amazon sellers and online retailers doesn’t need to be complicated.  With Hanley & Co, you can get straightforward advice and accounting for your online retail business.  Get in touch with our team today on 0161 339 7502 (Ashton-under-Lyne), 01253 320018 (Blackpool), and let us help you save valuable time with our specialist online reseller and amazon accountant service.

Some of our recent experience:

• Investigating the apparent perceived gap in Pan European FBA ‘VAT Agents’ duties leading to under-declaration of VAT liability.
• Assisted a client whose selling account was blocked to obtain a UK VAT registration number – in under 48 hours!
• Appointed by three large clients whose (separate) accountants had each totally misunderstood VAT liability calculations and Amazon accounting.
• Assisted a client with filing a German Vat return – it helped they spoke German!
• Helped a client obtain £150k of VAT refunds following a comprehensive and accurate submission to HMRC which resulted in just a one-hour VAT control visit. We were also able to help the HMRC’s officers understand some aspects of Amazon accounting.
• Setting up UK limited company specifically for Amazon.Com USA trading and advice regarding GST responsibilities, liabilities and systems.
• Advising eCommerce companies regarding Xero, Quickbooks, Kashflow, Freeagent, Pandle on-line bookkeeping systems.
• Advising smaller online traders on correct VAT registration responsibilities and assisting with delaying / deferring the registration where advantageous.
• Advising numerous Amazon businesses on manually or automatic (via Link My Books) data extraction from Seller Central to ensure correct VAT liability declared.
• Advising growing online trader companies on transition out of Flat Rate VAT scheme.
• Advising companies on transition through EU distance selling regulations and assisting with EU VAT registrations.
• Assisting eCommerce clients considering expanding into Amazon EU platform.

Challenges faced by Online Traders

From 1 January 2024, HM Revenue & Customs requires digital platforms to collect more detailed personal information on sellers and how much they are making from sales.

Sellers who have never declared their income from these sites could soon be on HMRC’s radar and face the prospect of large bills, or even fines, if they are not registered.

HMRC could already request the information from UK-based digital platforms on an ad hoc basis, but the new rules, which came into force from 1 January 2024, mean that this information will start to flow automatically – and globally.

Websites in any of the 38 countries which have signed up to rules set out by the Organisation for Economic Co-operation and Development (OECD), will collect information on UK-resident sellers and share this with HMRC.

If you are trading on-line and need to register with HMRC then Hanley and Co. are specialists in this area and we will provide you with all of the necessary advice.

How do we calculate your tax liability (and how can we minimise it?)

If you are just selling personal possessions and items from your attic there is no need to register as a business.  However, as soon as you buy items to sell them for profit you are deemed to be trading. If you buy and sell just a few items in the year your trading ‘gross’ profit may be covered by expenses and the authorities would not be too interested. However, once you ‘buy to sell’ more than a few items you will hopefully have made some level of profit and you should start keeping records and paying tax on any profits you make.  As soon as you “buy to sell” (other than possibly an odd item or two) this is a business and it is important that you notify the authorities within three months of commencing trading, otherwise you may be liable to a penalty.

Self Employed people are also liable to pay Class 2 National Insurance Contributions. Exemption (exception) from these ‘dues’ can be claimed if your expected level of ‘profits’ is below a certain amount per annum.  If you are an eBay trader and you also sell a few personal possessions you should keep records identifying these items but you do not need to pay tax on any profits made.

Your profits are determined annually. Start, by totalling your dealing profits less postage costs and eBay / Paypal costs. From this can be deducted the obvious business related overheads such as telephone costs, travelling costs, advertising, internet subscriptions, stationery, etc.  Deductions can also be made for a proportion of your motoring costs, depreciation of equipment and a contribution towards household expenses. You may even be able to claim for wages paid to people who help you with the business.  There are, of course limits and guidelines as to how much you can claim.  An experienced accountant can usually provide very cost effective advice to help you to legally minimise your declarable profits.

How much tax should I expect to pay?

If online trading is your only taxable income then you will pay NI on annual profits over the NI threshold and tax on annual profits over your personal allowance.  Higher profits attract 40% or 45% tax but just 2% National Insurance.  If online trading is extra to your PAYE salary you still pay Class 2 and Class 4 National Insurance (subject to an overall contribution ceiling). Your tax liability is calculated by adding together your salary and your profits, and taking off any PAYE tax you suffered in your employment in the relevant tax year.

We can provide you with an estimate of your tax liability as your trading year progresses and will advise you about saving towards your liabilities with advice about the normal tax payment dates.

Should I trade through a limited company?

There are a number of reasons why you might chose to trade through a limited company. Fuller details are shown on our main website pages under ‘business information’. As a general guide though we recommend considering ‘going limited’ if your profits from online trading exceed say £20,000 per year (assuming you have no other income). If you have other sources of income such as a PAYE salary the benefits of ‘going limited’ can come in at lower levels of profit.  Many clients prefer using a limited company if they sell products which might occasionally generate product liability claims.

Advice about VAT registration

As accountants for many eCommerce businesses and Amazon sellers we find VAT to be the most frequent area where problems arise.

A business must register for VAT when the value of your taxable supplies exceeds the registration threshold. If the value of your taxable supplies in the past 12 months (or less) has exceeded the current VAT registration threshold or the value of your taxable supplies in the next 30 days alone is expected to exceed this figure.  Beware, the registration test is assessed on a rolling twelve month basis.

Our ‘top tip‘ is to be aware that your turnover on Amazon is the total amount the customer pays Amazon for your product and postage and packaging.  It is not (as many believe) the amount your business receives from Amazon after their commission and fulfilment charges.

Registration (within one month) is compulsory once you have exceeded the threshold.  Late registration can result in a belated notification penalty (which may just be a nominal amount if you act promptly).

Segregation (splitting) of your business activities is usually ineffective once the VAT officers are looking at your affairs.

We will advise clients about eligibility for the Flat Rate Scheme – which can save time and money. For FRS ineligible businesses we will advise on other schemes like the Global Margin Scheme and how to handle the bookkeeping for sales and purchases of zero-rated products. We will amend the bookkeeping systems to make VAT return preparation and submission painless.  We show clients how to handle the VAT submissions and most clients engage us to check and submit their quarterly returns.

Call us for detailed advice about VAT registrations, business segregations, late registrations, and explanations of the financial impact of being VAT registered.

eCommerce Accountants – Hanley & Co