You open your Amazon Seller Central dashboard, see a healthy pile of sales, then realise you have no idea how much of that money is actually yours. Between referral fees, FBA fulfilment fees, storage charges, VAT across three countries and currency conversions that change by the hour, FBA accounting eats hours you could spend sourcing new products. This guide walks through the bits that trip up most UK sellers in 2026.
Why FBA Bookkeeping Is Harder Than Normal Ecommerce
A standard Shopify shop gives you a payout, a fee and a cost of goods figure. FBA gives you dozens of fee types, stock sitting in warehouses in different countries, and sales settled in EUR, USD and GBP at the same time.
If you’re still pulling a single “Amazon” line into Xero or QuickBooks each fortnight, you’ll be understating costs and overstating profit. HMRC doesn’t care how complicated Amazon is. They expect your numbers to be right.
The Three Layers You Actually Need to Track
- Gross sales by marketplace (amazon.co.uk, amazon.de, amazon.com and so on)
- Fees by type (referral, FBA, storage, long-term storage, advertising, refunds, reimbursements)
- Stock movements in and out of each fulfilment centre
Miss any of these and your margin reports lie to you.
Inventory: Stock and Work in Progress
Inventory is an asset on your balance sheet, not an expense. You only expense stock when it sells, through cost of goods sold (COGS). This matters because buying £30,000 of stock in March doesn’t mean £30,000 comes off your profit that year.
Valuing Your FBA Stock
You need the landed cost per SKU: supplier invoice plus shipping, import duty, freight forwarder fees and inspection costs. If you ship 1,000 units at £4 each and spend £1,200 bringing them in, your per-unit cost is £5.20, not £4.
Work in progress (WIP) applies if you’re doing any assembly, bundling or private labelling. Components sitting in your UK garage waiting to be kitted up are WIP until they become finished goods.
Tools That Make This Bearable
A2X, Link My Books and Sellerboard all connect Amazon to Xero or QuickBooks and split each settlement into proper categories. Pick one. Manual journaling of Amazon settlements is a waste of your evenings.
VAT Across Multiple Regions
If your taxable turnover crosses £90,000 in any rolling 12-month period, you must register for UK VAT. That 12-month test catches sellers out every quarter. It’s rolling, not your accounting year.
Selling Into the EU
Post-Brexit, you have a few options:
- OSS (One Stop Shop):
- Import One Stop Shop
- Local VAT registration
UK VAT Schemes Worth Knowing
The Flat Rate Scheme rarely suits FBA sellers because your input VAT on stock purchases is usually substantial. Standard VAT accounting, with proper input VAT reclaim on goods and Amazon fees (where VAT is charged), is almost always better.
Amazon’s Fee Stack
Every sale pays multiple fees. Your bookkeeping should separate them so you can actually see which SKUs make money.
Referral Fees
Amazon’s commission, usually 8 to 15 percent depending on category. This is a selling expense, not a cost of goods.
FBA Fulfilment Fees
Pick, pack and ship charges based on size and weight. Split these into their own account so you can monitor whether a product’s margin is being eaten by oversized fees.
Storage Fees
Monthly storage is cheap, long-term storage (items sitting over 180 or 365 days) is brutal. Track these separately so you can spot dead stock before it hits you again.
Advertising (Sponsored Products, Brands, Display)
PPC spend should be tracked by SKU or at least by campaign. If you’re spending 20 percent of revenue on ads to make 15 percent margin, you’re paying Amazon to sell your stock for you.
Multi-Currency Bookkeeping in Xero and QuickBooks
Xero and QuickBooks Online both handle multi-currency on their higher tiers. Turn it on before you make your first EUR or USD sale, not after.
How Currency Should Flow
- Amazon settles a payout in EUR to account.
- Your bookkeeping software records the payout at that day’s exchange rate.
- When you convert EUR to GBP, the realised gain or loss posts automatically to a foreign exchange account.
Worked Example
You receive a EUR 10,000 Amazon DE payout on 3 March at 1.17 (so £8,547). You convert it to GBP on 12 March at 1.19 (so £8,403). The £144 difference is a realised FX loss, deductible against profits. Your software should post that automatically when you record the conversion.
Making Tax Digital From April 2026
Self-employed FBA sellers with gross trading income over £50,000 fall into the first wave of MTD for Income Tax from 6 April 2026. That means quarterly digital updates to HMRC plus a final declaration, using compatible software.
If you’re a limited company, MTD for ITSA doesn’t apply, but MTD for VAT does and Corporation Tax digital filing is already standard. Either way, your bookkeeping needs to be cloud-based and kept up to date monthly, not rescued in January.
FAQ and Quick Summary
Do I need to register for VAT in every EU country I sell to?
Only where you hold stock. For distance sales, OSS covers you from one registration.
Are Amazon referral fees tax-deductible?
Yes, all genuine business fees (referral, FBA, storage, advertising) are deductible against your trading profit.
Should I use Xero or QuickBooks?
Either works. Xero has slightly better multi-currency UX in our view. The integration tool (A2X or Link My Books) matters more than the ledger itself.
When do I record inventory as an expense?
When the unit sells, via COGS. Until then it sits on your balance sheet.
Get Your FBA Numbers Sorted
FBA accounting done properly shows you which SKUs actually make money, keeps HMRC happy, and gives you confidence to reinvest. Done badly, it hides losses for months.
If you’d rather let a specialist handle this, get in touch.