Making Tax Digital for Etsy sellers
Last reviewed 28 October 2026 against GOV.UK guidance. General information, not tax advice.
Short answer: If you sell on Etsy as a sole trader and your qualifying income on your 2025 to 2026 tax return is over £30,000, you need to use Making Tax Digital for Income Tax from 6 April 2027. Qualifying income is turnover before expenses, so Etsy fees, ads and postage labels don't bring you under the line. You'll keep digital records and send a cumulative quarterly update through HMRC-recognised software, with the first due by 7 August 2027.
Does MTD apply to my Etsy shop?
MTD for Income Tax applies to sole traders and landlords who are registered for Self Assessment and whose qualifying income is above the threshold for that year. Qualifying income is your total turnover from self-employment and property, before expenses, taken from the tax return for the year before. HMRC's start dates are:
- over £50,000 on the 2024 to 2025 return: from 6 April 2026
- over £30,000 on the 2025 to 2026 return: from 6 April 2027
- over £20,000 on the 2026 to 2027 return: from 6 April 2028
If your Etsy shop is your only business, its gross sales are the number that matters. If you also sell elsewhere or let a property, those amounts are added together. Some people are exempt, for example if they're digitally excluded. HMRC has a checker and an exemptions page (links below).
Why your Etsy deposits are not your turnover
Etsy pays you a net figure. Before money reaches your bank, Etsy has already taken transaction fees, processing fees, listing fees, Etsy Ads or Offsite Ads, and any postage labels you bought. HMRC's guidance says that if you only know your net income, you should find the full amount before expenses, record that as income, and record the expenses separately.
Etsy also collects sales tax or VAT from buyers in some places and pays it on to the tax authority. That money passes through your statement but it was never your income, so it shouldn't be in turnover.
What to export from Etsy
The monthly statement CSV is the most useful Etsy file, because it is the only one that includes listing fees, ads and postage labels as well as sales and refunds.
- On Etsy.com, go to Shop Manager, then Finances.
- Choose Monthly statements, then View all monthly statements.
- Pick the year and month and select Generate CSV. Etsy emails you when it's ready.
- Use the link in the email to download the CSV. Repeat for each month.
Etsy statements run by calendar month, but the tax year runs 6 April to 5 April. For a full 2027 to 2028 tax year you need 13 statements: April 2027 to April 2028, because 1 to 5 April 2027 belong to the previous year and 1 to 5 April 2028 belong to this one. For the first quarterly update (6 April to 5 July 2027) you need April, May, June and July 2027. The Sold Orders CSV is optional. It contains buyer names and addresses, which you usually don't need for tax records.
Worked example: deposits under £30,000, turnover over it
Example Illustrative figures for a full tax year, not real seller data.
| Line | Amount |
|---|---|
| Item sales after discounts | £28,400.00 |
| Postage charged to buyers | £3,100.00 |
| Less refunds to buyers | −£600.00 |
| Turnover (gross, before expenses) | £30,900.00 |
| Sales tax collected and paid on by Etsy (not your income, excluded) | £420.00 |
| Transaction fees | −£2,047.50 |
| Payment processing fees | −£1,420.00 |
| Listing fees | −£310.00 |
| Etsy Ads | −£900.00 |
| Total deposited to your bank | £26,222.50 |
Looking at the bank account, this seller appears to be under £30,000. On a gross basis they're over it. The £4,677.50 of Etsy charges are business expenses, recorded separately. They don't reduce turnover.
Key dates for the April 2027 group
| Date | What happens |
|---|---|
| 31 Jan 2027 | Deadline for your 2025 to 2026 return. It's the one HMRC uses for the £30,000 test |
| 6 Apr 2027 | MTD starts if qualifying income was over £30,000. Digital records from this date (standard periods) |
| 7 Aug 2027 | First quarterly update (6 Apr to 5 Jul 2027) |
| 7 Nov 2027 · 7 Feb 2028 · 7 May 2028 | Updates 2, 3 and 4 (each cumulative from 6 April) |
| 31 Jan 2029 | Submit the 2027 to 2028 tax return through your software and pay |
| 6 Apr 2028 | Threshold falls to £20,000, based on the 2026 to 2027 return |
Penalty points for late quarterly updates apply from 2027 to 2028. 4 points means a £200 penalty. GOV.UK: send quarterly updates.
Want your Etsy exports turned into one MTD-ready workbook?
TidyTill reads Etsy, eBay, Amazon, PayPal and Shopify exports, works out gross turnover, splits it into MTD periods and flags gaps and duplicates. Upload your exports and see your totals, quarters and Health Check free before you pay. Then £19 one-off for a workbook or £49 a year for unlimited workbooks. Paid workbook downloads open very soon; the free preview works now.
Try the free preview Get launch updatesQuestions
Do Etsy fees count towards the £30,000 MTD threshold?
Yes, in the sense that the threshold is measured before they come off. HMRC defines qualifying income as total turnover from self-employment and property before expenses, so you can't use Etsy fees to get under £30,000. You still claim them as expenses.
Can I keep using a spreadsheet for my Etsy shop under MTD?
Yes. HMRC says you can keep spreadsheet records as long as you use software that links to them (bridging software) to send quarterly updates and your tax return. Downloading a CSV and importing it into another product counts as a digital link. Copying and pasting or retyping figures doesn't.
Etsy reported my sales to HMRC. Does that mean I'm in MTD?
Not by itself. Platform reporting is information sharing, not a new tax. Whether you need MTD depends on whether you're trading, whether you're in Self Assessment, and your qualifying income on the previous year's return.
Do I need to sort every Etsy fee into a category?
If your turnover from that business is under £90,000, HMRC lets sole traders record only whether each transaction is income or an expense. Full categories are optional unless your turnover reaches £90,000.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
- Work out your qualifying income for Making Tax Digital for Income Tax (GOV.UK)
- Using Making Tax Digital for Income Tax for the first time (GOV.UK)
- Create digital records (digital links, simpler categorisation, net income) (GOV.UK)
- Send quarterly updates (update periods and deadlines) (GOV.UK)
- Find out if you can get an exemption from Making Tax Digital for Income Tax (GOV.UK)
- Selling goods or services on a digital platform (platform reporting) (GOV.UK)
- How to calculate your Etsy Payments deposit amount (monthly statement CSV) (Etsy Help)
- Sole traders and landlords earning more than £30,000 urged to act now (5 October 2026) (GOV.UK)
This page is general information based on the GOV.UK guidance linked above, as it stood on 28 October 2026. It isn't tax advice. Rules and dates can change, so check GOV.UK or ask an accountant about your own situation. TidyTill isn't HMRC-recognised software and doesn't send anything to HMRC.
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