How UK accountants actually take a marketplace seller’s records, from a pile of exports and receipts, to something that can be reviewed, approved and filed. This report describes the existing workflow only. It does not propose products, tools or commercial ideas.
Nine findings that shape everything else in this report.
Use the filter to see which statements are confirmed by official sources and which are practitioner reports, interpretation or gaps.
| Record | What it contains | Where it comes from | Evidence |
|---|---|---|---|
| Settlement or payout report | The full breakdown behind one deposit: sales, refunds, each fee type, adjustments, reserves and the amount transferred. | Amazon settlement reports, eBay payout reports, Etsy monthly statements, Shopify payouts. | Confirmed |
| Date range transaction and summary report | Income, expenses, taxes and fund transfers over a chosen period rather than per payout. The summary is a PDF; the detail can be downloaded for a spreadsheet. | Amazon payments reports. | Confirmed |
| Transaction report (CSV) | Every account event for a date range: date, order number, buyer, payout date and fees. | eBay Seller Hub, Payments tab. | Confirmed |
| Monthly financial statement (PDF) | Orders, claims, refunds, disputes, payouts, fees and credits for the month. | eBay Seller Hub. | Confirmed |
| Monthly statement CSV | All activity in the payment account for a month, including the fees and taxes applied to sales. | Etsy Shop Manager, Monthly statements, Generate CSV. | Confirmed |
| Sold orders spreadsheet | Order-level detail: item, quantity, price, postage charged, buyer location and date. | Etsy, eBay and Amazon order reports. | Confirmed |
| Digital sales reporting pack | The figures the platform reported about the seller to HMRC, as a PDF plus the underlying CSV. | eBay Payments tab, Taxes section. | Confirmed |
| Fee and advertising invoices | Commission, fulfilment, storage, advertising and subscriptions, with the VAT treatment shown. | Platform billing sections. ICAEW warns some advertising is billed from Luxembourg rather than a UK VAT-registered entity, which changes the VAT position. | Practitioner |
Confirmed that HMRC names bank statements, till rolls and paying-in slips as acceptable evidence.
Practitioner ICAEW notes goods from China often involve staged payments in US dollars over months, which complicates both cost and cut-off.
Confirmed that under traditional accounting HMRC expects a year-end stock value to be recorded. The cash basis has been the default for sole traders since 2024/25.
Before any of it, the accountant needs HMRC authorisation. For Making Tax Digital that means a digital handshake, an agent services account and signing the client up. Confirmed
| Route | What comes this way | What it is like in practice |
|---|---|---|
| Email attachments | CSV exports, PDF statements, photographed receipts. | Most common with small sellers. Poor version control, files lost in threads, sensitive data sitting in inboxes. Interpretation |
| Client portal | Requested document lists, signed approvals, final accounts. | Used by larger practices. Gives a trail of what was asked for and when it arrived. Interpretation |
| Shared drive | Bulk exports, folders of receipts. | Convenient, but folder discipline decays and duplicates build up. Anecdotal |
| Accountant exports directly | Settlement and transaction reports, pulled using client-granted access. | Removes the risk of the client exporting the wrong report or the wrong dates. Interpretation |
| Open banking feeds | Daily bank and card transactions into Xero, QuickBooks, Sage or FreeAgent. | Standard practice. Feeds break, duplicate or miss days, so opening and closing balances still have to be checked. Interpretation |
| Marketplace connectors | Summarised settlement journals posted straight into the ledger. | A2X, Link My Books, Taxomate and similar. Removes typing, not judgement. Practitioner |
| Receipt capture and OCR | Purchase invoices read into the ledger with the image attached. | Dext, Hubdoc, AutoEntry. Dext also flags likely matches to already-reconciled bank lines, which helps prevent duplicates. Practitioner |
| Spreadsheets | The seller’s own records, or the accountant’s working file. | Still central. HMRC accepts spreadsheets as digital records for MTD as long as bridging software submits the figures. Confirmed |
| A carrier bag of paper | Receipts, statements, handwritten notes. | Still real, particularly for market traders and older resellers. Anecdotal |
Click any stage to see what is needed, who owns it, what tools are used, what usually goes wrong, and where judgement is required.
Dashed lines are loops: supporting evidence arrives alongside platform data, and query answers go back into processing.
Software vendor claims are labelled as practitioner evidence, because vendors have an interest in the answer.
Xero, QuickBooks Online, Sage and FreeAgent. This is where the VAT return and the MTD updates are produced.
Iris, TaxCalc, Taxfiler, BTCSoftware, CCH. Turns a trial balance into statutory accounts and a tax computation, and files them.
A2X and Link My Books are the two most often named in UK practice. They read the settlement behind each payout and post one summarised, categorised entry that matches the deposit.
Dext, Hubdoc and AutoEntry read invoices and receipts and attach the image to the ledger entry.
Practitioners report that eBay data cannot be split cleanly into UK and non-UK sales for VAT, so the file goes to Excel for manual categorising before upload. Anecdotal
Transactions posted to wrong accounts, bank accounts muddled, wrong dates entered, and reconciliation broken. Often slower to fix than to start from scratch. Anecdotal
ICAEW warns that VAT due overseas must be identified and excluded from the UK return, or the client pays VAT twice. Practitioner
Switch the parts of a settlement on and off below to see how a single payout is built, and how little of it the bank statement reveals. The figures are illustrative only.
Every item you switch off is a cost or an adjustment the accountant would have to find somewhere else, because the bank shows only the final figure.
| Cause | What happens |
|---|---|
| Netting | The payout is already net of fees and refunds, so gross sales never appear in the bank at all. |
| Timing | A sale on 30 March may not settle until early April, so the sale and the cash fall in different months or even different tax years. Practitioner guidance is to recognise revenue on settlement and carry the marketplace balance as a receivable. Practitioner |
| Batching | One bank credit can cover many orders, and sometimes several settlement periods. |
| Reserves and holds | The platform keeps money back, so the payout is less than the settlement total. Common practice is to carry it as a receivable that clears when released. Practitioner |
| Refunds and chargebacks | They reduce a later payout for a sale that was recorded earlier. |
| Currency | Foreign currency sales converted at the platform’s rate, differing from the accounting rate. |
| Split payouts | The platform pays in two tranches, or into two different accounts. |
| Bank feed noise | Duplicates, missing days, or a feed that reconnected and re-imported. |
This is common practice, not a legal requirement in this specific form. Interpretation
Unidentified balances are usually reserves or holds, which either clear in a later settlement or are cleared by journal. Practitioner
| Problem | How it is caught |
|---|---|
| Duplicate sales | The same sales entered once by a connector and once by a manual import or the bank feed. Found by comparing total posted sales to the platform’s own gross sales figure. |
| Duplicate expenses | The same invoice captured by OCR and also entered by hand. Found by supplier and amount review, and by matching tools. |
| Missing sales | A platform or a month left out. Found by comparing to the platform’s HMRC-reported figures and by looking for unexplained bank credits. |
| Unexplained bank items | Anything the ledger cannot account for goes on the query list. |
| Mixed personal and trading activity | Found by scanning personal accounts for platform credits, and by reviewing anything that looks like household spending. |
| Ambiguous classification | Flagged rather than guessed, and taken to the seller. |
A second person reviews the file. Typical tests are analytical rather than arithmetic:
Common practice
Two different things. Repetitive work that is slow but has a right answer, and judgement, where there is no single right answer and the accountant carries the responsibility.
This distinction matters more than any other in the report. Most of what an accountant does is not legally required. What is required sits with the seller.
| Responsibility | Whose | Category |
|---|---|---|
| Keep records of all sales, income and business expenses, with supporting evidence | Seller | Legal requirement |
| Keep digital records, send quarterly updates and a final declaration where MTD for Income Tax applies | Seller, usually performed by the agent | Legal requirement |
| Keep VAT records digitally with digital links, and file through compatible software | Seller, usually performed by the agent | Legal requirement |
| Register for VAT when the threshold is crossed | Seller | Legal requirement |
| Tell HMRC about trading income above the £1,000 trading allowance | Seller | Legal requirement |
| Confirm the return is accurate and approve it before submission | Seller | Legal in substance Interpretation on the mechanics |
| Provide context only the seller knows | Seller | Common practice, but without it the accountant cannot finish |
| Obtain agent authorisation before acting | Accountant | Legal requirement |
| Prepare, reconcile, review and submit | Accountant | Common practice under the engagement |
| Keep working papers and a defensible audit trail | Accountant | Common practice plus professional body rules |
| Advise on thresholds and obligations | Accountant | Professional judgement |
HMRC does not receive the underlying receipts and invoices in a quarterly update. It receives category totals.
| Output | Goes to | Applies to |
|---|---|---|
| Quarterly updates Totals per income and expense category, cumulative from the start of the tax year. Due 7 August, 7 November, 7 February and 7 May. No accounting or tax adjustments needed first. | HMRC | Sole traders and landlords within MTD for Income Tax Confirmed |
| Final declaration after the year end | HMRC | Same population |
| Self Assessment return (SA100 with SA103) | HMRC | Sole traders |
| Partnership return (SA800), plus each partner’s own return | HMRC | Partnerships |
| VAT return, filed through compatible software. Generally due one calendar month and seven days after the period ends. | HMRC | VAT-registered businesses Confirmed |
| Statutory accounts, generally within nine months of the year end | Companies House | Limited companies Confirmed |
| Company Tax Return (CT600) with accounts and computation, within twelve months of the period end. Tax is payable nine months and one day after the period end. | HMRC | Limited companies Confirmed |
| Accounts or an income and expenditure summary for the seller | Seller | Management information, not a filing requirement for unincorporated businesses |
| Tax computation and payment schedule | Seller | Common practice |
Pick a seller type to see what changes about the records and about the work.
| Variable | Effect on the workflow |
|---|---|
| Low volume | Often handled entirely in a spreadsheet from platform exports and bank statements. Connectors may not be worth the cost. |
| High volume | Posting individual orders becomes impractical, so settlement-level summarised posting is the norm. Practitioner |
| One platform | One reconciliation stream. Comparatively straightforward. |
| Several platforms | Each has its own report formats, fee names, payout rhythm and VAT quirks. A clearing account per platform becomes necessary. |
| Good client bookkeeping | The accountant reviews and adjusts rather than builds. |
| Poor or client-attempted bookkeeping | Often slower than starting from scratch, because errors must be found before they can be fixed. Anecdotal |
| No bookkeeping at all | Incomplete-records reconstruction from bank statements and platform data. |
| Situation | What changes |
|---|---|
| Below the trading allowance | No requirement to tell HMRC about that income. Confirmed |
| Self Assessment only | An annual cycle. Records must be kept but the format is flexible. |
| Within MTD for Income Tax | Records must be digital and hold the amount, date and category for each transaction. Where turnover for that income source is below £90,000 a simplified approach applies, under which a sole trader need only record whether something is income or expense. Retailers may record daily gross takings instead of individual sales. Quarterly updates are cumulative from the start of the tax year, and a calendar-quarter election is available. Confirmed |
| VAT-registered | Quarterly returns through compatible software, digital records, digital links between systems, and a country and rate split on sales. Registration is triggered at £90,000 on a rolling twelve months, or on the 30-day forward test. Confirmed |
| Goods located overseas, or an overseas seller | The marketplace may be the deemed supplier and account for the VAT, particularly on consignments of £135 or less, which changes what the seller reports. Confirmed |
| Limited company | Accounts to Companies House and a CT600 to HMRC. Outside MTD for Income Tax. Confirmed |
Desk research carried out on 5 August 2026, working outwards from official guidance to practitioner accounts.
Started with HMRC and GOV.UK to establish what is legally required. Then official platform documentation to establish what data actually exists. Then professional bodies, software vendor documentation and practitioner writing to establish what accountants do. Where only vendor material existed, the claim is labelled accordingly.
No practising accountants were interviewed and no real client files were reviewed. Everything about day-to-day practice is derived from published accounts of practice rather than direct observation.
Confirmed official source with a link. Interpretation a reasonable reading, not stated in those words. Practitioner credible but sometimes self-interested. Anecdotal illustrative only. Gap could not be verified.
| Section | Confidence | Why |
|---|---|---|
| Legal and regulatory obligations | High | Direct GOV.UK guidance, quoted and linked. |
| What data platforms provide | High | Official Amazon, eBay and Etsy documentation. |
| Reconciliation mechanics | Medium to high | Consistent across independent practitioner and vendor sources, but vendors have an interest. |
| Intake methods and internal practice workflow | Medium | Largely inference from tool documentation and practitioner writing. |
| How common any given practice is | Low | No survey data found. |
| Differences between seller types | Medium | Logical extension of confirmed rules, plus practitioner commentary. |
Nothing published on how accountants actually receive ecommerce records, what share use connectors rather than spreadsheets, or how long each stage takes.
ICAEW and ACCA e-commerce practice pages render through script-driven layouts. Their substance is reflected here through search extracts and should be verified before formal citation.
How far back a seller can download settlement data was not verified per platform, and these limits change.
How the retail relaxation applies to marketplace sellers is not addressed directly in the guidance reviewed.
Not verified from official platform documentation to the same standard as the Amazon change.
No credible published data comparing ecommerce work to other small business work.
How often HMRC challenges marketplace seller returns after platform reporting is reported anecdotally but not quantified.
Type to filter the list.
