I hear a version of this question most weeks. "We turn over £1.4m. Our accountant does the year end and the VAT return. Do we need an ecommerce specialist, or is that just a more expensive version of the same service?"
Here is the direct answer. The label is not the test. There is no law that makes a specialist reconcile your platform reports, carry your stock properly or close your month. Plenty of generalists do all three. Plenty of firms with "ecommerce" on the homepage do none of them.
What changes at your size is the scope you need. The sales data sits in three or four places, the stock is real money, and the year end accounts arrive too late to steer anything. Whether the person doing that work calls themselves a specialist matters far less than whether the work is in the engagement.
Below I'll show you what the two scopes look like, where the money hides, and when a filing-only service is the right buy. I'll name what we do too, so you can judge it. The tax figures are the rules as they stand in October 2026.
What Does An Ecommerce Specialist Actually Do?
"Ecommerce accountant" is not a protected title. There is no statutory ecommerce accounting qualification. Anyone can use the label, so the label tells you very little on its own.
What separates one service from another is three pieces of work.
One: sales rebuilt from source. A filing-only service posts the bank receipts. A reconciled service takes each platform's reports and matches them to the bank, so gross sales, refunds, fees and reserves all appear. Either scope can be bought from either type of firm. Ask which one is in the quote.
Two: stock carried properly. Unsold goods are inventory, not an expense. Cost of sales starts with opening stock, adds net purchases, directly attributable inbound freight and non-recoverable import duty, then deducts closing stock. An error in closing stock changes profit by the same amount.
Three: the month closed. Year end accounts tell you what happened. A monthly close tells you what is happening. At £1m the second one is the difference between steering and reading the crash report.
None of that requires a special title. It requires time, a process and a fee that pays for both.
What Actually Changes When You Get To £1m?
First, the honest answer. There is no general tax, VAT or audit threshold at £1m of turnover. Nothing switches on at seven figures. What happens is that the rules you already meet get heavier, and the operational complexity arrives before the statutory one.
VAT. The test is taxable turnover, not total turnover. You must register if your taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days. Your return and payment are usually due one calendar month and seven days after the period ends. If you use the Annual Accounting Scheme, your return and balancing payment are normally due two months after the period ends. If the period is under four months, the deadline is one month. Most businesses file quarterly. Reaching £1m does not change your filing frequency by itself.
Marketplace VAT. For a UK-established seller with goods in the UK, the seller accounts for VAT on marketplace sales. The deemed supplier rules mainly cover specified sales by overseas sellers and low-value imports. Check each sales flow separately. If you sell through a platform, you still file the return and keep the records.
Corporation tax. It is based on profit, not turnover. For a 12 month period with no associated companies, the small profits rate is 19% up to £50,000. The main rate is 25% above £250,000, with marginal relief between. Short periods and associated companies reduce those limits. In a simple case, a £10,000 disallowable cost adds £1,900 at the small profits rate, £2,650 in the marginal relief band, or £2,500 at the main rate.
Audit. For a financial year beginning on or after 6 April 2025, a private company may qualify as small if it meets at least two limits: turnover no more than £15m, balance sheet total no more than £7.5m, and 50 or fewer average employees. Meeting two limits does not guarantee an audit exemption. Group status, the articles or a shareholder request can still require an audit. Turnover of £1m only proves you meet the turnover limit.
VAT cash accounting. To join, you must expect taxable supplies of no more than £1.35m in the next year and meet the other conditions. Once you are in, you normally leave at the end of a VAT period if taxable supplies for the year ending then go over £1.6m. The test excludes VAT and includes disposals of stock and capital assets. A genuine one-off increase can qualify for an exception. Cash accounting helps credit sales. It gives little output VAT timing benefit when customers pay at checkout.
Making Tax Digital for Income Tax. From 6 April 2026, sole traders and landlords whose 2024 to 2025 return showed qualifying income over £50,000 must use it, unless exempt. Limited companies are outside that regime.
| What changes | Filing-only scope | Reconciled monthly scope | Effect on your numbers |
|---|---|---|---|
| Sales | Bank receipts | Platform reports matched to bank | Revenue and fees both appear |
| Stock | Purchases expensed | Stock ledger with freight and duty | Profit lands in the period of sale |
| VAT | Return from sales invoices | Each sales flow checked | Errors found before HMRC does |
| Reporting | Year end | Monthly close by channel | Margin visible while it matters |
| Platform data | Unread | Report reconciled to the ledger | Timing and deductions explained |
Where Does The Money Hide?
The bank feed is not wrong. It is incomplete. It tells you what arrived, not what happened.
Take a £60 VAT-inclusive marketplace sale of standard-rated goods. Revenue is £50 and output VAT is £10. The platform takes commission and a fulfilment fee, holds back a reserve, and pays you £41 three weeks later. If only the £41 is recorded, you lose the VAT, the fees and the reserve. Record £50 of revenue, £10 of output VAT, the fees as costs, and the reserve as money still due from the platform.
Platform reports vary. They can show sales, refunds, fees, reserves and adjustments. Advertising and other charges may sit in a separate report. Payout timing varies too. Amazon commonly pays on a 14 day cycle, while TikTok Shop and Shopify Payments run their own schedules. Reconcile each platform's report to its bank deposits and allow for the timing.
I would not assume every marketplace reports. Marketplace operators covered by the UK reporting rules report information about reportable sellers to HMRC each year and give you a copy of your information. The report is split into calendar quarters and shows amounts after fees, commission and taxes deducted. Your own Shopify store is not a reporting platform under those rules. The platform's annual report and your ledger should reconcile after timing and deductions, even though they will not be identical.
Stock is the second hiding place. A brand importing from China pays for goods in one month, freight and duty in another, and sells the stock over the following six. Expensing stock when you pay for it makes a stock build look like a bad year and a clearance look like a great one. The accounts are then measuring cash timing, not trading.
Creator commissions are the third. On TikTok Shop, affiliate commission is based on the product price excluding tax, less seller-funded discounts. At 20% VAT, a £30 VAT-inclusive price is £25 before VAT, so a 15% commission is £3.75, not £4.50. On current TikTok Shop orders, a refund before the creator is paid reverses the commission. A later refund does not. Do not assume every returned order recovers its commission.
What Happens When The Same Year Is Booked Two Ways?
Here is an illustrative example for a brand selling through one marketplace. The figures are made up.
Gross product sales were £1,180,000 excluding VAT. Refunds were £61,000, so net sales were £1,119,000. A marketplace fee assumed at 15% of net sales was £167,850. Fulfilment fees were £94,000. Cost of goods sold, including landed cost allocated to the units sold, was £430,000.
| Line | Bank feed only | Settlements reconciled |
|---|---|---|
| Revenue | 857,150 | 1,119,000 |
| Cost of sales | (430,000) | (430,000) |
| Gross profit | 427,150 | 689,000 |
| Platform fees | 0 | (261,850) |
| Operating profit | 427,150 | 427,150 |
| Gross margin before platform and fulfilment fees | 49.8% | 61.6% |
The bottom line is identical in this simplified example because every deduction is treated as a fee. The bank feed column is not acceptable accounting. The reconciled column shows sales and fees separately.
Read the two columns. The bank feed version says the product margin is 49.8% and there is nothing else to see. The reconciled version says the margin before platform and fulfilment fees is 61.6%, and those fees take 23.4% of net sales. They lead you to different questions: pricing, fee structure, fulfilment cost, channel mix. The figures alone do not tell you which action to take.
When Is A Generalist The Right Call?
Plenty of ecommerce businesses should buy a filing-only service, and a good generalist can provide it well. If most of these sound like you, the extra scope is hard to justify.
- You sell through one channel, and the platform payout is close to your revenue.
- You hold little or no stock, or the supplier ships directly to the customer.
- You are below the VAT threshold, or only just over it.
- Your transactions are few and the bank feed tells the whole story.
- You want annual accounts, a tax return and someone on the end of the phone twice a year.
There is no shame in buying compliance. Most businesses start there. The mistake is buying compliance and expecting management information.
What Should You Ask Before You Choose?
Ask both kinds of firm the same questions. The answers tell you more than the label.
1. Who reconciles the platform settlements, and how often? If the answer is "we post the payouts", you are buying filing-only. That may be fine. Just know what you are buying.
2. How are stock quantities tested, and how is landed cost built? You want to hear about counts, the cost formula, allocation of freight and duty, and how slow or obsolete stock is written down.
3. What do I get each month, and by what date? A date matters. "When you need it" is not a reporting cycle.
4. Who accounts for output VAT on each sales flow? Ask how import VAT is evidenced or handled under postponed VAT accounting, and what evidence supports VAT reclaimed on platform fees.
5. What is in the fee, and what is billed extra? A low monthly fee with hourly charges for every question is not cheap. Ask for the scope in writing.
6. Who actually does the work? In some firms you meet a partner and then deal with a junior for three years. That is fine if the junior is good and supervised. It is not fine if nobody tells you.
7. Which body supervises you for anti money laundering? An accountant handling your tax affairs has to be supervised. A firm that cannot answer that quickly is not one I would hand my ledger to.
What Does A Specialist Cost?
Do not compare fees until the scope matches. Get written quotes for the same channels, reconciliation frequency, stock work, VAT work, reporting and response times. A low monthly fee that excludes every question is not cheap, and a high fee that includes work you do not need is not value.
What we do at Social Commerce Accountants is a monthly close, platform reconciliation, stock and landed cost accounting, management reporting, statutory accounts, VAT returns and the Company Tax Return. If you only want annual filing, ask us for a scoped quote and compare it with other firms. I would rather you buy the right scope than the right label.
So Which One Should A £1m Brand Choose?
Choose the scope, then choose the person. If you need monthly channel numbers, put the contents and the delivery date in the engagement letter. If you only need the year end, buy that and spend the difference on stock or ads.
The test is simple. Ask for last month's numbers, by channel, with fees shown separately. If nobody can produce them inside a week, you know what is missing.
If you want that conversation with us, book a call and bring your last three settlement reports. We will tell you what the accounts are missing before you decide anything.
FAQ
Is an ecommerce specialist accountant more expensive than a generalist?
Sometimes. The scope is bigger when someone is reconciling settlements, maintaining a stock ledger and producing monthly management accounts, so the fee reflects more work. The comparison only holds when the scope is identical. Ask both firms to quote for the same list of work.
Can a generalist accountant handle a £1m ecommerce brand?
Yes, if the scope covers the work: platform reconciliation, stock at landed cost and a monthly close. The label does not decide it. Ask what is included, who does it and when you receive it.
What should I ask a specialist before switching accountants?
Ask who reconciles the platform settlements, how stock and landed cost are valued, what the monthly pack contains and when it arrives, how VAT is handled on each sales flow, and what is included in the fee. Then ask who does the actual work. The answers separate a real specialist from a generalist with a new homepage.
For more on what the work looks like day to day, read what an ecommerce accountant actually does and the guide to hiring an ecommerce accountant. If VAT is the part that worries you, start with the TikTok Shop VAT guide, or look at how we work with Amazon sellers and how inventory accounting fits into the monthly close.