UK Tax Tips for Sole Traders Running an Online Shop

Selling online as a sole trader? Here’s what you need to know to stay on the right side of HMRC: And keep more of what you earn.

Registering as a Sole Trader

You must register with HMRC if you earn more than £1,000 in a tax year.

Register via the HMRC website and you’ll be given a Unique Taxpayer Reference (UTR).

Keep Accurate Records

Track all sales, expenses, receipts and mileage.

Use software like QuickBooks, Xero or FreeAgent to stay organised.

Know Your Allowable Expenses

You can deduct:

Platform fees (Etsy/Amazon fees)

Postage and packaging

Marketing costs

Office supplies

A portion of home office costs (electricity, broadband, etc.)

Be Aware of VAT Thresholds

If your turnover exceeds £90,000 (as of 2025), you must register for VAT.

Submit Your Self Assessment

Deadline: 31 January for the previous tax year (paper deadline is earlier).

Penalties apply for late filing or payment.