Record keeping for eBay sellers in the UK: what to keep and a simple monthly routine

What records do eBay sellers need to keep?

Good record keeping for eBay sellers means being able to show HMRC every pound that came in and every pound you spent on the business, with evidence for each. If you trade on eBay, gov.uk's guide to business records if you are self-employed says you must keep records of all sales and income, and all business expenses. gov.uk also sets how long you must keep them, so check that page and do not throw old records away early.

The aim is simple: anyone reading your records should be able to see what you sold, what you received, what it cost you and how you got from those numbers to your profit.

This guide covers the practical side. It is not tax advice, so check your own situation with HMRC or a qualified accountant.

Why is your eBay payout not your sales figure?

The most common record keeping mistake is treating the money that lands in your bank as your income. With eBay's managed payments, eBay collects the buyer's payment, takes off fees and any refunds or holds, and pays you the rest. Your payout is a net figure.

For your records and your tax return you need the gross picture: the full sales value as income, and the fees as an expense. Recording only the net payout understates both your sales and your costs. That matters for HMRC's tests, which use gross figures. The trading allowance and Self Assessment registration rule look at gross trading income, and VAT registration looks at taxable turnover.

A worked example of a payout reconciliation

Example: suppose a hypothetical seller receives one weekly payout of £812.40. The figures are invented to show the method.

The records should show £1,000.00 of sales, a £50.00 refund and £137.60 of fees, not a single line of £812.40. If the lines do not add up to the payout, something is missing: a hold, a fee for a promoted listing, a postage label bought through eBay or a charge for a case.

How do you set up records for an eBay business?

A good setup takes an afternoon and saves days every year.

1. Open a separate bank account. Use it only for the business. Payouts arrive there and business costs leave from there.
2. Choose your tool. A spreadsheet is enough for many sellers; bookkeeping software helps once you have many transactions or need Making Tax Digital.
3. Create a folder structure. One folder per tax year, with sub-folders for sales reports, eBay invoices, supplier invoices, postage and other expenses.
4. Save receipts at the time. Download supplier invoices as soon as you order, and photograph paper receipts the same day.
5. Write down your methods. Note which date you use for sales, how you convert foreign currency and how you value stock, then stick to them.

What about stock you have not sold yet?

If you buy stock to hold, keep a simple stock list with what you bought, what it cost and what is left at the end of the year. Unsold stock affects your profit calculation, and the treatment depends on whether you use the cash basis or traditional accounting. gov.uk explains the cash basis, and an accountant can tell you which suits you.

Costs you use for both business and personal life

Some costs are shared: your phone, your broadband, a room at home or your car. Only the business part counts as a business expense, and you need a sensible, consistent way to work out that part. Keep a note of how you split each one, for example the share of phone use for the business or the business miles from a simple mileage log. gov.uk lists what you can claim in its guide to expenses if you are self-employed, including simplified flat rates for some costs.

What is a good monthly routine?

Record keeping goes wrong when it is left until January. A monthly routine of about an hour keeps it under control.

1. Download the month's reports. Get the order report, the transaction report and the monthly invoice from Seller Hub.
2. Record sales and refunds. Add the month's gross sales, postage charged and refunds to your sheet or software.
3. Record eBay fees. Use the invoice to record fees by type, so you can see what promoted listings cost you.
4. Match payouts. Tick each payout in your bank statement against the orders, fees and refunds it covers.
5. Record other costs. Add supplier invoices, postage, packaging and subscriptions, each with its evidence saved.
6. Update running totals. Check your rolling 12-month turnover for VAT and your tax-year income for Self Assessment.
7. Note anything odd. A missing payout, a case or a hold gets a short note while you still remember the details.

The rolling turnover check is the one sellers skip and later regret. Our guide to the VAT threshold for eBay sellers shows how to work it out.

How does Making Tax Digital affect record keeping for eBay sellers?

Making Tax Digital for Income Tax changes how sole traders keep and send their records. According to gov.uk's page on when you need to use Making Tax Digital for Income Tax, sole traders and landlords must use it:

• from 6 April 2026 if their qualifying income in 2024 to 2025 was over £50,000;
• from 6 April 2027 if it was over £30,000 in 2025 to 2026;
• from 6 April 2028 if it was over £20,000 in 2026 to 2027.

Once it applies, you keep digital records and send regular updates to HMRC using compatible software. Records that already follow the monthly routine above move across easily. Records kept as a box of receipts do not. If you are close to one of these levels, it makes sense to start keeping digital records now.

How do records help with HMRC's platform reporting?

Digital platforms such as eBay may have to report seller details and income to HMRC. A seller of goods is not reported if they made fewer than 30 sales and received 2,000 euros (about £1,700) or less in the year. HMRC can compare these reports with tax returns, so your figures should be explainable against eBay's.

Differences are normal: refunds, cancelled orders, currency conversion and the dates used can all make your numbers differ from the platform's. Good records let you explain each one quickly if HMRC writes to you. Our guide to HMRC digital platform reporting explains the rules.

What records do repricing and sourcing tools add?

If you use software to manage listings, it can hold useful evidence. Price changes, stock changes and supplier order numbers all help explain what happened to an order months later, especially in a dispute or when a margin looks wrong. Dropizon, for example, records a reason for every price push and every hold it makes on an eBay listing, which gives you a trail for each change. Export or note anything you need for your accounts, because tool data is not a substitute for your own books.

If you source from suppliers, keep each supplier invoice against the eBay order it fulfilled. Being able to show cost and sale price side by side is the quickest way to check your profit per item.

A quick checklist

• Open a business bank account and route all payouts and costs through it.
• Set up a folder per tax year and save every invoice and receipt at the time.
• Record gross sales, refunds and eBay fees separately, never just the payout.
• Do the monthly routine, including matching every payout.
• Track your rolling VAT turnover and your tax-year trading income.
• Check whether and when Making Tax Digital for Income Tax applies to you.