Selling on Amazon can open your products to millions of UK shoppers, but it also brings fees, VAT rules and HMRC reporting obligations that every seller must understand before listing a single item. This guide breaks down the costs, tax responsibilities and compliance changes affecting UK Amazon sellers in 2026.
How much does it cost to sell on Amazon?
Amazon offers two core selling plans, and choosing the right one depends on how many items you expect to sell each month.
- Individual plan: No monthly subscription, but you pay £0.75 (excluding VAT) per item sold, plus applicable referral fees.
- Professional plan: A flat £25 (excluding VAT) monthly subscription, regardless of sales volume, plus referral fees on every sale.
The Professional plan also unlocks Buy Box eligibility, Sponsored Products advertising, bulk listing tools and access to restricted categories, none of which are available on the Individual plan.
When does the Professional plan pay off?
The break even point sits around 34 to 35 units sold per month. Below that, the Individual plan’s pay as you sell structure usually costs less; above it, the flat £25 fee becomes cheaper.
| Units sold per month | Individual plan cost | Professional plan cost |
|---|---|---|
| 10 | £7.50 | £25.00 |
| 34 | £25.50 | £25.00 |
| 50 | £37.50 | £25.00 |
| 100 | £75.00 | £25.00 |
Note that the £25 fee excludes VAT, so sellers who cannot reclaim VAT effectively pay £30, shifting the crossover to around 40 units.
What other Amazon fees apply?
Beyond the plan fee, several additional charges reduce your margin on every sale.
- Referral fees: A percentage of the total sale price (item price plus shipping and gift wrap), varying by product category; most categories sit around 15%.
- Closing fees: An extra £0.50 per item on media products such as books, DVDs, video games and games consoles.
- FBA fulfilment fees: Charged if you use Fulfilment by Amazon, covering picking, packing and delivery.
- Fuel and logistics surcharge: From 17 April 2026, a 1.5% surcharge applies to FBA fulfilment fees across the UK and several other European stores.
- Storage fees: Monthly charges for stock held in Amazon’s warehouses.
A simplified example for a £30 item sold via FBA under the Professional plan looks like this:
| Fee type | Approximate amount |
|---|---|
| Referral fee (15% of £30) | £4.50 |
| FBA fulfilment fee | £3.00 |
| Monthly storage (per unit) | £0.10 |
| Professional plan (apportioned) | £0.50 |
| Total fees per unit | Around £8.10 |
This example is illustrative only, and actual fees vary by category, size and weight.
Do I need to register as a business to sell on Amazon?
You do not always need a formal business to start selling, but you must supply your details to Amazon during registration, and you may need to register with HMRC once your trading income grows. If you are already operating as a registered business, such as a sole trader or limited company, you will need to provide that information when setting up your Seller Central account.
Will I need to pay tax as an Amazon seller?
Whether you owe tax depends on how much profit you make and whether HMRC classes your activity as trading.
The trading allowance
Individuals can earn up to £1,000 of gross trading income in a tax year before needing to tell HMRC, known as the trading allowance. This allowance covers all your casual selling income combined, not a separate £1,000 for each platform you use.
Income Tax bands for 2026/27
Once profits exceed the trading allowance and your Personal Allowance, Income Tax applies on a sliding scale.
| Band | Taxable profit (2026/27) | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
These figures are frozen for 2026/27, meaning more sellers gradually move into higher bands as profits rise.
VAT registration
You must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12 month period, or if you expect to exceed it within the next 30 days. Registration is voluntary below this threshold, though some sellers choose to register early to reclaim VAT on stock and business costs. Amazon may also ask you to confirm your VAT status directly.
When will Amazon report my sales to HMRC?
Since new digital platform reporting rules took effect, Amazon and similar marketplaces must automatically share seller data with HMRC every year, rather than waiting for a specific request. Amazon must report you if, within a calendar year, you meet either of these criteria:
- You make more than 30 sales.
- You earn more than €2,000 (roughly £1,700) in revenue.
This reporting is based on gross sales, not profit, and runs separately from the trading allowance rules. HMRC feeds this data into its Connect system, which cross checks platform figures against your tax return, so mismatches can trigger an automatic enquiry or a “nudge letter” prompting you to review your filing.
Can I claim Amazon seller fees as an expense?
Yes. Self employed Amazon sellers pay tax on profit, not total sales revenue, so allowable business expenses can be deducted before working out what you owe. Common allowable expenses include:
- Amazon selling plan fees, referral fees and closing fees
- Shipping and packaging costs
- Marketing and advertising spend
- Photography equipment and product imagery costs
- Software subscriptions and licences, such as inventory or design tools
- FBA storage and fulfilment charges
This list is not exhaustive, so check with your accountant if you are unsure whether a cost qualifies, rather than missing out on legitimate deductions.
Key deadlines and record keeping tips
- Set aside roughly 25 to 30% of profit for Income Tax and National Insurance throughout the year.
- The Self Assessment payment deadline is 31 January following the end of the tax year.
- Monitor your rolling 12 month VAT taxable turnover monthly, and register within 30 days of exceeding £90,000.
- Keep digital records of sales, fees and expenses rather than manual spreadsheets, since HMRC now receives platform data automatically.
How UK Ecommerce Accountants can help
Selling on Amazon involves layered fees, shifting VAT thresholds and new HMRC reporting rules that catch many sellers off guard. Our team at UK Ecommerce Accountants specialises in supporting amazon sellers through every stage of this journey.
- Calculating true profit margins after Amazon referral, fulfilment and storage fees
- Advising on whether the Individual or Professional plan suits your sales volume
- Managing VAT registration, Making Tax Digital compliance and quarterly filings
- Reconciling Amazon Seller Central reports against your bookkeeping records
- Identifying allowable expenses to reduce your Income Tax or Corporation Tax bill
- Preparing accurate Self Assessment or company accounts ahead of HMRC deadlines
- Guiding you through HMRC platform data queries or nudge letters with confidence
- Structuring your business as a sole trader or limited company for tax efficiency
Frequently asked questions
Do I have to pay to sell on Amazon UK?
Yes, Amazon charges either a per item fee under the Individual plan or a monthly subscription under the Professional plan, plus referral and category specific fees on each sale.
How much can I earn on Amazon before paying tax?
You can earn up to £1,000 in gross trading income under the trading allowance before you need to report it to HMRC, though this covers all your online selling combined.
Does Amazon tell HMRC how much I sell?
Yes, Amazon must report seller data to HMRC if you make more than 30 sales or earn over roughly £1,700 in a calendar year.
When do I need to register for VAT as an Amazon seller?
You must register once your taxable turnover passes £90,000 in any rolling 12 month period, or if you expect to exceed it within 30 days.
Can I deduct Amazon fees from my taxable income?
Yes, referral fees, subscription fees, shipping costs and other selling expenses are generally allowable deductions against your Amazon profits.
