Use gross sales revenue, not your Amazon settlement payout after fees.
If you sell products through Amazon FBA, Amazon Seller Central, or a mix of Amazon plus other channels, you're self-employed (or running through a business structure) for tax purposes. and the same Making Tax Digital gross-income rule applies to you as to any other trader. The single most common mistake sellers make with MTD is using the wrong number entirely: mistaking their Amazon settlement payout, the amount that actually lands in your bank, for their real gross sales revenue.
These two figures can differ by a huge margin once you account for referral fees, FBA fulfilment fees, storage fees and refunds. Getting this distinction right matters, because MTD qualifying income is based on gross sales, not on what Amazon actually pays out.
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026. Live since April 2026 |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
Amazon's settlement report shows the net figure actually deposited into your bank account, after deducting:
None of these reduce your MTD qualifying income. They are business expenses that reduce your taxable profit, calculated separately. For MTD threshold purposes, you need your gross order value, the total price customers actually paid, before Amazon took anything out.
| Expense Category | Examples |
|---|---|
| Cost of goods sold (COGS) | What you paid your supplier or manufacturer for stock |
| Platform fees | Amazon referral fees, FBA fulfilment and storage fees |
| Advertising | Amazon PPC, social media ads, influencer spend |
| Shipping and packaging | Inbound freight to FBA warehouses, branded packaging |
| Software and tools | Inventory management, repricing, keyword research tools |
| Photography and listing costs | Product photography, copywriting for listings |
It's worth being explicit about this because it trips up a lot of growing sellers. MTD for Income Tax and VAT registration are entirely independent obligations with different thresholds and different rules:
A seller with £45,000 in gross Amazon sales is below the VAT threshold but, from April 2027, is above the MTD for Income Tax threshold. You need to track both independently.
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| Quarter | Period | Deadline | 2026–27 Soft Landing |
|---|---|---|---|
| Q1 | 6 Apr – 5 Jul 2026 | 7 Aug 2026 | No points if late |
| Q2 | 6 Jul – 5 Oct 2026 | 7 Nov 2026 | No points if late |
| Q3 | 6 Oct 2026 – 5 Jan 2027 | 7 Feb 2027 | No points if late |
| Q4 | 6 Jan – 5 Apr 2027 | 7 May 2027 | No points if late |
| Final Declaration | Full year 2026–27 | 31 Jan 2028 | Not soft-landed |
Gross sales. Your Amazon settlement report shows the net amount paid to your bank after referral fees, FBA fees and other charges are deducted, but MTD qualifying income is based on gross sales revenue before any of these deductions. This is a common and costly mistake, since settlement totals can be 15 to 40 percent lower than actual gross sales.
No, they are separate. The UK VAT registration threshold is £90,000 in taxable turnover. MTD for Income Tax thresholds are lower and phased: £50,000 from April 2026, £30,000 from April 2027, and £20,000 from April 2028. You could cross the MTD threshold well before you need to register for VAT.
Yes. If you sell through multiple channels as one self-employed business, all gross sales are combined to determine your total MTD qualifying income, regardless of which platform or website generated the sale.
No. What you paid your supplier for stock is a business expense that reduces your taxable profit, not your gross qualifying income. MTD thresholds are assessed on gross sales revenue before any costs, including inventory costs, are deducted.
Only your gross self-employment selling income counts towards the MTD threshold, not your PAYE salary. If your Amazon gross sales stay below the relevant threshold for your phase, you will not need to comply with MTD, even if your combined total income is high.
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