Amazon Account Level Reserve Accounting for UK Sellers

The Account Level Reserve is money Amazon owes you but has not yet released. In your books it is a balance due from Amazon, held as a current asset, never a fee or an expense. The sale behind it counts as income when the sale happens, and any VAT on it follows the sale, not the payout. If you post the reserve as a cost, you understate profit. If you wait for the payout before recording the sale, your VAT and year-end figures drift.

This article is part of our Amazon FBA accounting guide. It covers what the reserve is, how to post it, and how to plan cash around it.

What the Account Level Reserve Is

Amazon holds back part of your balance to cover refunds, A-to-z claims and chargebacks on recent orders. Amazon's forum staff describe the standard setting as seven days after the delivery date, usually written DD+7. Money from an order becomes available once that period has passed. Amazon can lengthen the period for an account after reviewing its risk and history.

Where the order has valid tracking through an integrated carrier, Amazon uses the confirmed delivery date. Without valid tracking it uses the latest estimated delivery date, which can push release back by several days. For FBA orders Amazon controls the tracking, so the main variable is how quickly the parcel reaches the customer.

Because the reserve is tied to recent orders, it grows as sales grow. A Black Friday week or a product that suddenly takes off raises the amount held, even when nothing is wrong with the account.

Why UK Sellers Feel It More Since 2025

Delivery-date reserves have applied to new UK and European accounts since 2016. Amazon moved older accounts across from August 2023 and warned of a one-off cash dip while the new reserve built up. Sellers who asked for more time were given extensions, and the last of those ended on 30 September 2025. Every UK account is now on delivery-date terms, and North American accounts followed on 12 March 2026.

For a seller who joined years ago, this permanently changes working capital. Cash that used to arrive with the next settlement now arrives a week or more after each order is delivered.

Where the Reserve Shows in Seller Central and Settlement Files

The Payments dashboard shows an Account Level Reserve figure against each settlement, and the transaction view lists money not yet available as an unavailable balance. Menu names change, so work from the current reports in your own account.

Two lines in the settlement flat file matter for bookkeeping:

• Current Reserve Amount: the sum Amazon is holding back at the end of this settlement. It appears as a deduction from the payout.
• Previous Reserve Amount Balance: the reserve from the last settlement, released into this one. It appears as an addition.

Over time the two lines net against each other. Neither belongs in the profit and loss account.

How to Post the Reserve in Your Books

Set up a balance sheet account called something like Amazon reserve, or keep the movement inside your Amazon clearing account. When a settlement holds money back, debit the reserve account. When the next settlement releases it, credit the reserve account. Sales, refunds, referral fees, FBA fees and advertising stay in their own income and expense lines.

These are hypothetical figures, not Amazon rates. The profit and loss account shows £12,000 of sales, £400 of refunds and £3,600 of fees. The £400 rise in the reserve sits on the balance sheet as money still owed to you. Posting the £1,900 as a fee would make this period look £1,900 less profitable and the next one £1,500 more profitable, with no change in the trade.

At each month end, the reserve and clearing balances in your software should agree with the balances Seller Central shows for the same date. When they do not, the gap is usually a settlement that straddles the month end. Our article on the settlement timing gap explains the same problem on other payout platforms.

Income Timing on Accruals and the Cash Basis

Limited companies, and sole traders using traditional accounting, record the sale when it is made. The payout date does not move the sale into another period, so a sale on 28 March that Amazon releases in April belongs to a March year end.

Most sole traders now use the cash basis, which became the default for unincorporated businesses from the 2024 to 2025 tax year. The question then is when you receive money that Amazon has collected from the customer but not yet passed on. HMRC's trading guidance does not answer this directly. Its property manual treats rent as received when a letting agent collects it rather than when the agent pays the landlord, and the same reasoning points to income counting when the customer pays Amazon. Choose one treatment, write down why, and apply it the same way every year.

VAT Is Due on the Sale, Not the Payout

A UK-established seller registered for VAT accounts for VAT on its own Amazon sales. The tax point for goods is normally when they are sent or made available to the customer, as HMRC's VAT guide, Notice 700 sets out. Money still in reserve at a quarter end does not reduce the VAT on those sales, so the VAT bill can fall due before the cash from those sales reaches you.

Overseas sellers are treated differently. For goods already in the UK at the point of sale, the marketplace accounts for the VAT and the overseas seller is treated as making a zero-rated supply to Amazon, as described in HMRC's guidance on overseas goods sold through online marketplaces. Our article on who accounts for the VAT on marketplace sales covers both routes.

This may also change for UK sellers. On 23 June 2026 HMRC opened a consultation on making marketplaces account for VAT on sales of UK-held goods by UK businesses. Its lead option applies only above £90,000 of sales on a single platform. The consultation closed on 18 August 2026, and no decision or start date has been published. If it goes ahead, Amazon would deduct VAT before paying you, which would change how both the settlement and the reserve reconcile.

Planning Cash Around DD+7

If you pay suppliers before goods ship, you need cash to cover the time between paying for stock and receiving the sale proceeds. Under delivery-date reserves, that gap is the delivery time, plus seven days, plus the wait for the next settlement, plus the bank transfer.

• Forecast the reserve as a balance that rises with sales, not as a fixed sum. Peak months need the most cover.
• Put VAT quarter ends, the 31 January Self Assessment payment and corporation tax due dates in the same forecast, because those bills are based on sales the reserve may still be holding.
• Requesting payouts more often only moves money that is already available. It does not shorten the reserve period.
• If the reserve jumps without a matching rise in sales, check your account health and performance notifications before assuming it is seasonal.

Our 13-week ecommerce cash flow forecast shows how to keep amounts due from platforms separate from cash in the bank.

Year End and Closing the Books

Any reserve Amazon still holds at the year end goes on the balance sheet as a debtor. Reconcile it to the Seller Central figure at the balance sheet date and keep that report. Where Amazon has withheld money against a specific claim or dispute, check whether it is still recoverable rather than carrying it forward unchanged.

If you would like us to set up the reserve and clearing accounts or check a year end, see our Amazon FBA accountants service.

Questions Sellers Ask About the Amazon Reserve

Is the Account Level Reserve an expense?

No. It is money Amazon owes you, so it belongs on the balance sheet. The costs are the fees, refunds and chargebacks that Amazon actually deducts.

How long does Amazon hold the reserve?

The standard setting releases funds seven days after the delivery date. Amazon can extend that for an individual account, and the amount held rises and falls with your sales.

Do I pay VAT when Amazon pays me or when I make the sale?

A UK-established, VAT-registered seller accounts for VAT under the normal tax point rules, which follow the sale rather than the payout date.

Why is my reserve higher than usual?

The usual causes are higher sales, slower deliveries, or missing tracking, which makes Amazon use the estimated delivery date. A risk review can also extend the period, so check your account notifications.