What expenses can resellers claim?
Resellers can often reduce taxable profit by deducting allowable business expenses. The key test is whether the cost is genuinely for the business and properly recorded.
Important information
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Who this guide applies to
- eBay sellers
- Vinted resellers
- Depop sellers
- Amazon resellers
- Facebook Marketplace sellers
- Etsy vintage sellers
- Online marketplace sellers
Common costs to consider
- cost of stock
- platform fees
- postage
- packaging materials
- storage costs
- business mileage
- payment processing fees
- advertising
- cleaning and repair costs
Cost of stock
For most resellers, the biggest cost is the item bought for resale. Keep records of what you bought, when you bought it, what it cost and what it later sold for. This helps separate personal clear-outs from trading stock. Stock might include clothes, trainers, electronics, books, collectibles, vintage goods, craft supplies or bulk bundles bought to split and resell. If you buy a bundle, it can help to record the total cost and how you allocated it across items. If stock values become significant, timing and inventory treatment can become more complex, so consider professional help.
Platform fees, postage and packaging
Selling fees, payment processing fees, postage labels, packaging materials and courier costs may be relevant business expenses. Keep screenshots, receipts or platform reports so the figures can be checked later. This includes fees from eBay, Vinted, Depop, Etsy, Amazon, Shopify or payment processors where they relate to the business. Packaging can include boxes, mailing bags, tape, labels, tissue paper, bubble wrap and printer ink for labels. Postage should be supported by receipts, courier accounts or platform labels. If customers pay postage, record both the postage charged as income and the postage paid as a cost.
Home, travel and mixed-use costs
Some resellers may have costs for mileage, storage, phone use, internet or working from home. Mixed personal and business costs need careful treatment. Claiming a reasonable business-use share is safer than treating the whole cost as business-only. Travel may include trips to source stock, collect items, post parcels or attend fairs where the journey is genuinely for business. Keep mileage logs or travel receipts. If you use part of your home to store stock or package orders, there may be a business-use element, but the claim should be reasonable and supported by records.
Cleaning, repairs and preparation costs
Resellers may incur costs to prepare items for sale. This can include cleaning products, replacement parts, batteries, minor repairs, garment steamers, lint rollers, photography backgrounds or listing tools. The cost should be connected to the resale activity. If a tool is used partly for personal life and partly for business, consider a reasonable business-use share. Keep receipts and notes explaining why the cost was needed. Preparing items properly can affect profit, so these costs should not be ignored when estimating taxable profit.
What resellers should not claim carelessly
Avoid claiming personal spending just because it happened near the business. Everyday clothing, personal travel, home costs with no business connection and items kept for personal use should be treated carefully. If you buy items intending to resell but later keep some personally, make a note so your records stay accurate. Do not claim the same cost twice. If a platform deducts a fee before paying you, make sure you understand whether your records show gross sales and fees separately or only net deposits.
Record keeping for resellers
A useful reseller record includes item name, source, date bought, purchase cost, listing platform, date sold, sale price, platform fees, postage charged, postage paid, packaging and profit. Keep supplier receipts, charity shop receipts, bank records, screenshots and platform reports. If you sell across multiple platforms, bring the figures together regularly. Good records help you choose between actual expenses and the trading allowance, estimate tax and understand which products are worth selling.
Returns, refunds, cancellations and lost parcels
Marketplace sales do not always remain completed sales. Keep the original order, any platform fee, the refund or cancellation and evidence of postage compensation as separate entries. Deleting the sale makes it harder to reconcile a platform statement or explain why a bank payout changed. If an item is returned and remains saleable stock, update its status rather than treating its original cost twice. If a courier compensates you for a lost parcel, record the payment and the related transaction so the net business effect is visible. Chargebacks and partial refunds deserve the same treatment. A monthly reconciliation of completed orders, returns, platform balances and bank transfers helps prevent both overstated income and duplicated costs.
Allocating the cost of bundles and collections
Resellers often buy a mixed bundle for one price and sell its items separately. Keep the supplier evidence and use a reasonable, consistent method to allocate the bundle cost across the items. Equal allocation may work for similar products, while a supportable relative-value method may better reflect a collection containing one high-value item and many low-value items. Document the method before the sales result is known, and do not allocate the entire purchase price only to the first item sold merely to reduce that sale profit. Mark items kept personally, damaged or still unsold. Where stock becomes valuable or numerous, year-end inventory and accounting treatment can affect the calculation, so a qualified accountant may be worthwhile. The important point is that the records connect the original purchase to the items and proceeds that followed.
Equipment is different from everyday running costs
A roll of mailing bags is a routine consumable; a computer, camera, storage system or specialist machine may be longer-lasting equipment. Both can be business costs, but they may not always be treated identically in the tax calculation. Record the purchase date, full price, business purpose and any private use rather than dropping every item into a general supplies column. The same care applies to a van, high-value shelving or professional photography equipment. Low-value tools used wholly for the trade are usually easier to evidence, while significant assets, finance agreements and mixed use can require more detailed treatment. A calculator may accept one expense total but cannot decide the correct capital allowance or private-use adjustment, so check HMRC guidance or obtain advice for material equipment purchases.
Worked example: multi-platform clothing reseller
Suppose Jay records £9,400 of gross sales across eBay, Vinted and Depop. Stock allocated to sold items costs £3,600, platform and payment fees are £820, buyer postage included in sales is matched by £940 of courier costs, and packaging and preparation cost £310. On these simplified figures, actual costs total £5,670 and provisional profit is £3,730 before considering other costs or year-end stock treatment. Recording only net marketplace payouts would hide some gross income and make fee reconciliation difficult. Jay actual costs are much more than the £1,000 trading allowance, so actual expenses may produce a lower provisional profit, but he should verify that every cost is allowable and not claim both methods. His salary or other income still affects the final tax estimate.
Build an evidence pack before filing
At the end of the tax year, save each platform annual report or monthly exports, a sales summary, stock purchase evidence, postage reports, refund records and receipts for other costs. Reconcile gross platform sales to the spreadsheet and explain any difference caused by timing, refunds or money held in platform balances. Keep a closing list of unsold stock where it is relevant and preserve the method used for bundles. Then retain the version of the records used for the return so later edits do not erase the audit trail. A concise evidence index with file names or links is often more useful than thousands of unsorted screenshots. This pack supports the tax return, helps an accountant work efficiently and reveals whether a product line is actually profitable after all marketplace costs.
Evidence for cash, charity shop and car boot purchases
Not every source gives a detailed invoice, but the absence of a printed receipt should not become an excuse for invented costs. Ask for a receipt where possible. Otherwise record the date, place or seller, items, amount, payment method and business purpose at the time of purchase, supported by a bank withdrawal, message, photograph or marketplace conversation where available. Number the source record and link it to the stock entries created from the bundle. Cash withdrawn is not proof that the full amount bought stock, so retain the contemporaneous note. Repeated high-value cash purchases, purchases from connected people or unsupported estimates carry more risk and are worth discussing with an accountant. Consistent source records are also commercially useful when checking authenticity, returns and the true margin on each item.
Consignment and selling for other people
If you sell stock owned by somebody else, keep a consignment statement showing the owner, item, sale price, marketplace deductions, amount returned to the owner and the commission you retained. Do not automatically describe the owner payment as your stock cost when the legal arrangement is an agency service. Your gross-income presentation depends on the facts and records, so agree the terms before listing and obtain advice where values are material. Separate consignment inventory from goods you own, and never count the same sale in both sets of records. Clear settlements also reduce disputes and explain bank transfers that would otherwise look like unexplained personal payments.
Official references
Frequently asked questions
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