Accountants for Dropshipping Businesses

For goods outside the UK in consignments of £135 or less sold directly to UK consumers, VAT is generally charged at the point of sale rather than at import. If you sell those goods through your own website, you account for that VAT. If you sell through an online marketplace, the marketplace is usually treated as the deemed supplier and accounts for it.

Consignments above £135 are subject to import VAT and any customs duty at the border. Who is the importer of record, and whether postponed VAT accounting is available, then becomes important.

Where a UK supplier ships UK stock to your customer, it is generally an ordinary domestic sale: you charge UK VAT if registered, and reclaim VAT on supplier invoices where valid VAT invoices are held. UK-established sellers on marketplaces normally account for their own VAT; the deemed-supplier rules primarily affect overseas sellers and low-value imports.

Shopify, Stripe and PayPal payouts are net of fees, refunds and holds. Record gross sales, then fees and refunds separately. Supplier invoices in dollars or other currencies should be recorded at an appropriate exchange rate, with exchange differences recognised in the accounts.

Advertising, refunds, chargebacks and processing fees can absorb most of the margin. Contribution margin per product after ad spend is a better measure than gross margin. Platform sales data is reported to HMRC, so declared income must match.

A dropshipping company files statutory accounts at Companies House, normally nine months after its accounting reference date, and a CT600 within 12 months of the end of its Corporation Tax accounting period. Most smaller companies pay Corporation Tax nine months and one day after the period ends; the main rate is 25%, with the 19% small profits rate up to £50,000 and marginal relief between £50,000 and £250,000.

VAT registration is required once taxable turnover passes £90,000 in a rolling 12 months, or is expected to within 30 days. Paying any salary, including to a director, brings PAYE and Real Time Information reporting, and employing eligible staff brings automatic-enrolment pension duties. The confirmation statement is a separate annual filing.

Thresholds, rates and deadlines reflect the 2026/27 UK position at the content update date. Check current GOV.UK guidance, or ask us, before relying on them for your own company.

We start with a free consultation to understand how you invoice, buy, pay people and get paid. You then receive a written scope and fee before chargeable work begins, covering bookkeeping, VAT, payroll, year-end accounts, CT600 and director Self Assessment as agreed.

Advisory work such as management accounts, cash-flow forecasting, pre-year-end planning or specialist reliefs is quoted separately rather than assumed to be included. Where a question needs specialist legal or tax advice outside our scope, we say so.