Shopify questionAnswer3 min read
Do I Need to Tell HMRC About My Shopify Income?
If your Shopify store is a business and your sales top £1,000 in a tax year, yes. Here's how the trading allowance, Self Assessment and the platform reporting rules fit together.
Key takeaways
- If your gross trading income is £1,000 or less in a tax year, the trading allowance means you usually don't need to tell HMRC.
- Above £1,000 before expenses, register for Self Assessment by 5 October after the end of that tax year.
- Buying goods to resell, or making goods to sell at a profit, usually counts as trading. Occasionally selling unwanted items doesn't.
- The digital platform reporting rules don't create a new tax. They make platforms share seller data with HMRC.
- Who it is for
- UK Shopify sellers
- Time needed
- 5 minutes to read
- What you need
- Your gross sales for the tax year
Yes, you need to tell HMRC about your Shopify income if you're trading and your gross income from it is over £1,000 in a tax year. Register for Self Assessment by 5 October after the end of the tax year in which you passed £1,000, then file a return. At £1,000 or less, the trading allowance means you usually don't need to tell HMRC at all.
I build Shopify stores for UK sellers, but I'm not an accountant. This summarizes HMRC's published guidance as checked on 7 November 2026. For your own situation, speak to an accountant or HMRC.
Are you trading?
HMRC says you're likely to be trading if you buy goods to resell, or make goods to sell at a profit. A Shopify store set up to sell products almost always counts. If you're not trading and just occasionally sell unwanted items, HMRC says there's no tax due. Clearing out your wardrobe is not the same as running a store.
The numbers that matter
| Rule | Figure | What it means |
|---|---|---|
| Trading allowance | £1,000 a year | Gross income, before expenses |
| Self Assessment deadline | 5 October | After the tax year you passed £1,000 |
| Tax year | 6 April to 5 April | Work out income for this period |
| Platform reporting | 30 sales or €2,000 | About £1,700, in a calendar year |
The £1,000 is gross income, meaning your sales before costs, not your profit. A store with £1,500 of sales and £1,200 of costs is still over the threshold. Keep records of your costs anyway, because they reduce the profit you pay tax on once you file.
How to register
- Check you need to file, using HMRC's online checker.
- Register for Self Assessment as self-employed by 5 October after the end of the tax year. For income in the year to 5 April 2026, the deadline is 5 October 2026.
- Wait for your Unique Taxpayer Reference, then file your return online.
Registering late can mean a penalty. If you run the store through a limited company, the rules are different: the company files its own returns. My guide to sole trader vs limited company compares the two.
The digital platform reporting rules
Since January 2024, digital platforms collect seller details and report them to HMRC once a year. Sellers with fewer than 30 sales of goods and under €2,000, about £1,700, in a calendar year aren't reported. Platforms report your name, address, date of birth, National Insurance number and earnings.
These rules are aimed at platforms where sellers register to sell, such as marketplaces. HMRC's guidance doesn't say whether your own Shopify store counts, but it doesn't change your duty either way: HMRC is clear that a platform reporting you doesn't mean you owe tax, and a platform not reporting you doesn't mean you don't. If you also sell on Etsy, eBay or Amazon, expect those platforms to report you once you pass the thresholds.
VAT is a separate question
Income tax and VAT are separate. Telling HMRC about your income doesn't register you for VAT, and VAT registration depends on your taxable turnover, not your profit. My VAT guide for Shopify stores explains when you need to register and how to set it up in Shopify.
What to do next
- Add up your gross sales for the current tax year from your Shopify reports.
- Register for Self Assessment if you're over £1,000, before 5 October.
- Set up simple bookkeeping that pulls in Shopify payouts and fees.
- Speak to an accountant if you're unsure whether you're trading.
Free tools
Check your own store
Free, no sign-up. Each one runs a part of this guide for you.
Frequently asked questions
Do I have to declare Shopify income to HMRC?
Yes, if you're trading and your gross income from it is over £1,000 in a tax year. Register for Self Assessment by 5 October after that tax year. At £1,000 or less, you usually don't need to tell HMRC.
Is the £1,000 trading allowance based on profit or sales?
Sales. It's gross trading income before expenses, so a store can be over £1,000 even if it made little or no profit.
Does Shopify report my sales to HMRC?
HMRC's guidance on digital platforms doesn't say whether a store you run yourself counts. It doesn't change your duty: you report your own income either way.
What are the HMRC rules for selling online?
If you buy to resell or make goods to sell at a profit, it's likely trading. Over £1,000 of gross income a year, register for Self Assessment. Occasional sales of unwanted items aren't taxed.
When is the Self Assessment registration deadline?
5 October after the end of the tax year in which you need to file. For the year to 5 April 2026, that's 5 October 2026.
Do I need to register for VAT on Shopify?
That depends on your taxable turnover, and it's a separate question from income tax. Registering for Self Assessment doesn't register you for VAT.
Sources
- Tax-free allowances on property and trading income, GOV.UK
- Register for Self Assessment if you're self-employed, GOV.UK
- Selling goods or services on a digital platform, GOV.UK
- No tax changes for online sellers, HM Revenue and Customs
Related services and work
I'm a Shopify developer and CRO specialist. I have built and improved Shopify stores since 2018, completed more than 1,000 projects, and hold a 4.96 average rating across 719 client reviews.
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