Amazon · MTD for Income Tax

Amazon sellers and Making Tax Digital for Income Tax (2027)

Last reviewed 28 October 2026 against GOV.UK guidance. General information, not tax advice.

Short answer: Sole traders selling on Amazon whose 2025 to 2026 qualifying income is over £30,000 join MTD for Income Tax on 6 April 2027. Amazon's settlement reports show sales, fees and refunds line by line. The tricky part is that one settlement can cross a quarter end, so you need to decide which date counts and split the settlement if needed.

What counts as turnover on Amazon

Turnover is what buyers paid you for goods and postage, less refunds. It's measured before Amazon's referral fees, FBA fulfilment and storage fees, subscription fees and advertising, which are expenses. Your bank deposit is the net of all of these, so it understates turnover.

Where Amazon collects tax and pays it on to a tax authority itself (it shows up as separate tax lines on some marketplaces), that tax isn't your income. Reimbursements, for example for lost FBA stock, are usually business income too, but they aren't sales. Keep them on their own line so you or your accountant can decide how to treat them.

Settlements that span two quarters

Amazon usually settles about every two weeks, so a settlement can start in one MTD period and end in the next. Each line in the Flat File V2 report has its own posted-date, separate from the settlement dates and the deposit date.

Under the cash basis (the default for sole traders) you record income when it's received. With a marketplace that collects money for you, sellers and accountants differ on whether that means the date Amazon posted the transaction or the date it paid you. HMRC's MTD guidance doesn't set a marketplace-specific rule. Pick one approach, apply it consistently, and agree it with your accountant if you have one. Using the posted-date and splitting settlements at the period boundary is the more precise option.

What to export from Amazon

Use the Flat File V2 settlement report. It's tab-delimited and has one row per amount, with transaction-type, amount-type, amount-description, amount and posted-date.

In Seller Central, open Payments and go to the reports area (often called Reports Repository or All statements). Menu names change from time to time.
For each settlement period, download the Flat File V2 version.
Download every settlement that overlaps the tax year, including the one that starts before 6 April and the one that ends after 5 April.

Amazon's developer documentation says the older flat-file and XML settlement report types are being removed on 11 November 2026, so use V2. On European marketplaces amounts may use a comma as the decimal separator (for example 95,00), so check your spreadsheet reads them correctly.

Worked example: one settlement, two quarters

Example An illustrative settlement from 28 June to 12 July 2027, deposited on 14 July 2027. Not real seller data.

Lines posted	Sales and postage	Amazon fees	Net
28 June to 5 July (Q1)	£1,840.00	−£410.00	£1,430.00
6 July to 12 July (Q2)	£1,260.00	−£290.00	£970.00
Settlement total (deposit)	£3,100.00	−£700.00	£2,400.00

If you go by posted-date, £1,840 of turnover falls in the first update, due 7 August 2027. If you go by deposit date, all £3,100 falls in the second. Either way, turnover is £3,100, not the £2,400 deposit.

Key dates for the April 2027 group

Date	What happens
31 Jan 2027	Deadline for your 2025 to 2026 return. It's the one HMRC uses for the £30,000 test
6 Apr 2027	MTD starts if qualifying income was over £30,000. Digital records from this date (standard periods)
7 Aug 2027	First quarterly update (6 Apr to 5 Jul 2027)
7 Nov 2027 · 7 Feb 2028 · 7 May 2028	Updates 2, 3 and 4 (each cumulative from 6 April)
31 Jan 2029	Submit the 2027 to 2028 tax return through your software and pay
6 Apr 2028	Threshold falls to £20,000, based on the 2026 to 2027 return

Penalty points for late quarterly updates apply from 2027 to 2028. 4 points means a £200 penalty. GOV.UK: send quarterly updates.

Want your Amazon exports turned into one MTD-ready workbook?

TidyTill reads Etsy, eBay, Amazon, PayPal and Shopify exports, works out gross turnover, splits it into MTD periods and flags gaps and duplicates. Upload your exports and see your totals, quarters and Health Check free before you pay. Then £19 one-off for a workbook or £49 a year for unlimited workbooks. Paid workbook downloads open very soon; the free preview works now.

Try the free preview Get launch updates

Questions

Do FBA fees reduce my qualifying income for MTD?

No. Qualifying income is turnover before expenses. FBA, referral and storage fees are expenses you claim, but they don't reduce the figure used for the MTD threshold.

I sell on Amazon and eBay. Is the threshold per platform?

No. It's your total turnover from all self-employment plus any property income on your return. Two platforms under £30,000 each can add up to more than £30,000.

Will penalties apply in my first year?

HMRC isn't applying penalty points for late quarterly updates in 2026 to 2027. From 2027 to 2028, when the £30,000 group joins, each late update gets a point, and reaching 4 points means a £200 penalty.

Sources

Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
Work out your qualifying income for Making Tax Digital for Income Tax (GOV.UK)
Send quarterly updates (update periods and deadlines) (GOV.UK)
Create digital records (digital links, simpler categorisation, net income) (GOV.UK)
Cash basis (GOV.UK)
Penalties for Making Tax Digital for Income Tax (GOV.UK)
Settlement report types (Flat File V2) (Amazon Selling Partner API docs)
Sole traders and landlords earning more than £30,000 urged to act now (5 October 2026) (GOV.UK)

This page is general information based on the GOV.UK guidance linked above, as it stood on 28 October 2026. It isn't tax advice. Rules and dates can change, so check GOV.UK or ask an accountant about your own situation. TidyTill isn't HMRC-recognised software and doesn't send anything to HMRC.