What Counts as an Allowable Expense
An allowable expense is any cost incurred wholly and exclusively for the purposes of your business. For Amazon sellers, this encompasses a wide range of costs that reduce your taxable profit and therefore your tax bill. Claiming everything you are entitled to is not aggressive tax planning — it is accurate accounting.
Stock and Sourcing Costs
The cost of products you buy for resale is your primary expense. This includes the purchase price, shipping costs to get stock to you, and any customs duties or import charges on overseas purchases. These are deducted as cost of goods sold when calculating your profit.
Amazon and Platform Fees
All Amazon fees are deductible: referral fees, FBA fulfilment fees, storage fees, advertising costs, subscription fees, and any other charges Amazon levies. Similarly, fees from other platforms (eBay, Shopify, etc.) are business expenses.
Business Operations
Prep materials (poly bags, labels, tape, boxes), software subscriptions (repricers, research tools, accounting software), internet and phone costs (business proportion), office supplies, computer equipment, and business insurance are all claimable. If you work from home, you can claim a proportion of household costs (utilities, council tax, broadband) based on business use.
Professional Services
Accountancy fees, legal advice, business coaching, training courses, and membership fees for relevant professional bodies are deductible. Bank charges and interest on business loans are also allowable expenses.
Travel and Vehicle Costs
Business mileage at HMRC's approved rates, parking, tolls, public transport for business journeys, and hotel and meal costs for overnight business trips are all claimable. Keep mileage logs and receipts for everything.
The key principle is that every pound of legitimate expense you claim reduces your tax bill. Keep receipts, categorise expenses accurately, and review with your accountant to ensure nothing is missed.