Allowable expenses for online sellers are the costs of running your selling: the stock you buy, platform fees, postage and so on. Taking them off your sales lowers your profit, which is what you pay tax on. The alternative is the flat £1,000 trading allowance; you use one or the other.
The short answer
- You can claim costs that are for your selling, such as stock, fees, postage and packaging.
- Only the business part of mixed costs counts, like your phone or internet.
- You cannot claim expenses and the £1,000 trading allowance together. Pick whichever gives the lower profit.
What online sellers can usually claim
GOV.UK groups allowable expenses into categories. Here is what they usually mean for someone selling on eBay, Vinted, Etsy or Depop:
| GOV.UK category | Online seller examples |
|---|---|
| Things you buy to sell on | Stock, charity shop and car boot buys, materials for things you make |
| Office costs | Packaging, labels, printer ink, the business part of your phone bill |
| Financial costs | Bank charges and payment processing fees |
| Advertising or marketing | Promoted listings, website costs |
| Travel costs | Fuel or fares for buying trips and post office runs (or the mileage rate) |
| Subscriptions | Seller tools and trade subscriptions you use for the business |
| Staff costs | Paying someone to help pack or photograph |
Platform selling fees (for example eBay final value fees or Etsy transaction fees) and the postage you pay to send orders are costs of making those sales, so they come off your sales too.
What you cannot claim
- Personal spending, or money you take out of the business for yourself.
- The personal part of mixed costs. GOV.UK’s example: if £70 of a £200 phone bill was for business calls, you claim £70.
- Any expenses at all, if you use the £1,000 trading allowance instead.
Flat rates instead of working out costs
Simplified expenses let you use flat rates for some costs:
| Hours worked at home each month | Flat rate a month |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 or more | £26 |
For a car or van, the flat rate is 45p a mile for the first 10,000 business miles and 25p after that for 2025 to 2026. From 6 April 2026 the first 10,000 miles go up to 55p. Phone and internet are not in the working-from-home rate; claim the business part separately.
Expenses or the £1,000 allowance?
| Seller A | Seller B | |
|---|---|---|
| Sales in the year | £1,800 | £4,000 |
| Real costs | £400 | £2,300 |
| Profit with real costs | £1,400 | £1,700 |
| Profit with the £1,000 allowance | £800 | £3,000 |
| Better choice | Allowance | Real costs |
If your costs are under £1,000, the allowance usually wins. Resellers who buy stock often have costs well over £1,000, so real costs win. You can choose each tax year.
Keep the records
Keep receipts and a list of costs with dates for at least 5 years after the 31 January deadline. A spreadsheet is fine: our eBay seller profit tracker and Etsy seller profit tracker keep fees, postage and cost of goods per sale. For dates and penalties, see Self Assessment for online sellers.
Official sources
This guide is general information, not tax advice. Rules can change and your situation may be different, so check GOV.UK or ask an accountant. Figures checked on GOV.UK on 13 November 2026.
Get the free eBay profit tracker (lite)
A one-tab spreadsheet that shows what you really earn on each sale, after fees, postage and costs. Enter your email and we will send it to you, plus the occasional seller tip.