Click here to book your FREE consultation meeting

Blog

2 min read

What taxes do I need to pay as an online seller?

As an online seller in the UK, you will encounter several taxes that you need to pay to remain compliant with the law and ensure the smooth operation of your business. Whether you’re selling on Amazon, eBay, Shopify or Etsy here are the key taxes you need to be aware of:

Income Tax

Income tax is applicable to the profits you generate from your online sales. It is calculated based on your net income, which is your total revenue minus allowable business expenses. As a self-employed online seller, you are responsible for reporting your income and paying income tax on the profits you earn.

Value Added Tax (VAT)

If your annual taxable turnover exceeds the VAT threshold (currently £85,000), you must register for VAT in the UK. VAT is a consumption tax added to the price of goods and services at each stage of the supply chain. As a VAT-registered seller, you will collect VAT from your customers on applicable sales and remit it to HM Revenue & Customs (HMRC) in your VAT returns.

Import VAT and Customs Duties

If you import goods from outside the UK, you may be liable for import VAT and customs duties. These taxes are typically paid when the goods enter the country. Depending on the value and nature of the imported goods, you might need to pay import VAT and customs duties at the point of entry.

Corporation Tax

If you operate your online business as a limited company, you will be subject to corporation tax on your profits. The current corporation tax rate for small businesses is 19%. Corporation tax is separate from income tax and is paid by the company, not the individual seller.

National Insurance Contributions (NICs)

As a self-employed online seller, you will also need to pay National Insurance Contributions on your taxable profits. NICs go towards the UK’s social security system and provide certain benefits, such as state pension and healthcare.

Conclusion

It’s important to keep accurate records of your income and expenses to calculate your taxable profits correctly and meet your tax obligations. Additionally, staying informed about any changes in tax regulations is crucial to avoid penalties and compliance issues.

To ensure smooth tax management, many online sellers choose to work with experienced accountancy firms like eAccounts. They can assist you with tax planning, preparation, and filing, helping you optimise your tax liabilities while staying compliant with all tax laws.

Remember that tax regulations can vary based on individual circumstances, and it’s always a good idea to seek professional advice to ensure you meet your specific tax obligations as an online seller in the UK.

For expert guidance on your tax obligations as a UK online seller, contact eAccounts, one of the UK’s leading online accountancy firms. We’ll ensure compliance and optimise your tax liabilities. Contact us at 02921 056209 alternatively email admin@e-accounts.co.uk for assistance.

Similar articles

Navigate articles, whitepapers and thought leadership pieces to learn more about eAccaunts

Questions remain?

Interested in our service?

Contact us to learn more about our services.