Online Seller

eBay, Etsy, Amazon, Vinted — know your tax obligations as an online seller.

Allowable Expenses

• Cost of Goods Sold — Purchase price of items you resell, or materials used to make items sold online.
• Platform Fees — eBay final value fees, Etsy transaction and listing fees, Amazon FBA fees — fully deductible selling costs.
• Packaging & Postage — Boxes, bubble wrap, padded envelopes, tape, and postage costs — all deductible.
• Photography Equipment — Lightbox, camera, or smartphone used to photograph products for listings.
• Storage & Fulfilment — Self-storage unit rent for stock, or Amazon FBA storage fees.
• Returns & Refunds — The net cost of accepted returns (restocking, disposal, or repair) is a deductible business cost.

Tax Tips

• HMRC receives data from online selling platforms — eBay, Etsy, Amazon, Vinted, and others report seller earnings automatically under DPPIR rules.
• Buying to resell is a trade — even occasional high-value resales may constitute trading if done with a profit motive.
• The £1,000 Trading Allowance covers casual online selling below this threshold — above it, register for Self Assessment.
• If you are based in the UK and sell to UK consumers, you may need to register for VAT once your taxable turnover exceeds £90,000.

Frequently Asked Questions

Does HMRC receive my selling platform data?

Yes. From January 2024, platforms including eBay, Etsy, Amazon, Vinted, and Airbnb are required to report UK seller data to HMRC annually under Digital Platform Reporting (DPR) rules. Your gross sales figures may be shared with HMRC regardless of whether you declare them.

Is selling old personal belongings taxable?

Selling personal belongings that you previously owned and are not selling as part of a trade is not normally taxable trading income (though valuable items may be subject to Capital Gains Tax). However, if you regularly buy items to resell for profit, HMRC will consider that a trade.

Can I deduct postage and packaging costs?

Yes. Postage, packaging materials (boxes, bubble wrap, tape), and shipping label costs are direct selling costs and fully deductible. If you use Click and Collect or courier services, those fees are also deductible.

How do I account for returns and refunds?

Refunds issued reduce your net income. If you refund a customer, deduct the refund from your gross sales to arrive at your net trading income. If the returned item is damaged or unsellable, the write-off is a deductible business cost.