Accountants for Fashion & Clothing Startups

Accountants for clothing and fashion startups: the short answer

Last updated: 14 October 2026

Starting a clothing brand means making early decisions about your legal structure, stock, VAT and funding that shape your tax bill for years. Accotax helps new fashion labels set up a limited company or register as a sole trader and set up stock and margin tracking. We also handle VAT, including the zero rate on most children’s clothing, and keep ecommerce records clean from your first sale.

Established labels should see our main fashion brand accountants page.

The fashion business is not all glamorous it is a competitive industry. Demands high standards across the board, from design to manufacture and retailing. Our accountants for fashion businesses will help you manage your finances in order to grow your business and help to save you money when it comes to paying your annual tax bill.

Your first-year checklist

Choose a sole trader or limited company structure; see startup accountants

2. Open a business bank account and connect it to cloud software

3. Register for VAT when your taxable turnover goes over £90,000, or earlier if it suits you

4. Set up your stock records: samples, production runs and landed costs

5. Connect Shopify, Etsy or Amazon to your bookkeeping

6. Protect your brand name and design rights

See Our Packages

Tax points for fashion businesses

The fashion world seems all glamorous from far away, however, even brands have to face the music when it comes to taxes and other finances. There are a number of complex issues that will affect your accounting processes. Our accountants for fashion business in London will provide proactive advice on how to maintain and improve your position on the market. We maximize your profitability by improving anything from stock control to auditing.

Stock and cost of sales

Manufacturing costs, fabrics, trims, shipping and import duty make up your cost of goods. You claim them when the stock is sold, not when you buy it, so year-end stock counts matter.

VAT on clothing

Most adult clothing is standard-rated at 20%. Children’s clothing and footwear designed for young children are usually zero-rated, which affects pricing and VAT reclaims.

Importing and exporting

If you import goods, you pay customs duty and import VAT. Postponed VAT accounting can protect your cash flow. If you sell to EU customers, the overseas VAT rules may also apply.

Samples and photoshoots

Samples, model fees and photography are usually allowable marketing costs.

Funding a fashion startup

Tax relief for SEIS and EIS investors can help you raise early investment. Start-up loans and pre-orders can fund your first production runs. We prepare forecasts that lenders and investors expect to see.

Frequently asked questions

Can I claim clothes I wear as a fashion founder?

Usually not. Everyday clothing is a personal expense, even if you design it.

How do I value unsold stock?

At the lower of cost and net realisable value. Stock you can only sell at a discount may be written down.

Should I register for VAT voluntarily?

Possibly, if you mainly sell to VAT-registered retailers or reclaim a lot of import VAT. See how to register for VAT.

Do you work with designers outside London?

Yes, throughout the UK.

Talk to Accotax

Want this handled for you? Our team at Accotax can help with accounting for your clothing or fashion startup. See our fashion brand accountants service, or contact us for a free, no-obligation quote.

This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.