Amazon sellers in the UK can usually claim expenses that are wholly and exclusively incurred for business purposes. Common allowable expenses include Amazon fees, FBA charges, stock purchases, packaging, postage, advertising, software subscriptions and accountant fees. Claiming legitimate expenses reduces your taxable profit and can significantly reduce your tax bill.
Whether you operate as a sole trader, limited company, Amazon FBA seller or online retailer, understanding which expenses you can claim is one of the easiest ways to improve profitability and avoid overpaying tax.
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Expense categories covered
HMRC allows businesses to deduct costs that are incurred wholly and exclusively for business purposes. This means if an expense is necessary for running your Amazon business, it can usually be claimed against your income before tax is calculated.
Higher allowable expenses = Lower taxable profit = Lower tax bill
Many Amazon sellers unknowingly overpay tax because they fail to claim all legitimate business expenses. Don't be one of them.
| Expense Category | Usually Claimable? | Example |
|---|---|---|
| Amazon Referral Fees | Yes | Marketplace selling fees |
| Amazon Professional Account Fee | Yes | Monthly seller subscription |
| FBA Fees | Yes | Storage and fulfilment charges |
| Product Purchases | Yes | Stock bought for resale |
| Packaging Materials | Yes | Boxes, labels, bubble wrap |
| Shipping Costs | Yes | Courier and postage charges |
| Advertising | Yes | Amazon PPC, Google Ads |
| Software | Yes | Inventory and accounting tools |
| Accountancy Fees | Yes | Professional accounting services |
| Bank Charges | Yes | Business account fees |
| Mobile Phone | Business usage proportion | |
| Internet Costs | Business usage proportion | |
| Home Office Costs | Usually | Business use of home |
| Training Courses | Usually | Business-related education |
| Mileage | Usually | Business travel |
One of the largest expenses Amazon sellers incur is marketplace fees. These can run into thousands of pounds per year and should be properly recorded.
A percentage fee charged on every sale. For most categories this ranges from 7% to 15%.
Pick and pack fees, storage fees, fulfilment fees and returns processing charges can all be claimed.
The monthly Professional Seller subscription fee is generally allowable as a business expense.
Charges deducted by Amazon when processing customer refunds can usually be claimed.
Advertising is usually one of the most overlooked Amazon seller expenses. If the advertising is intended to generate sales for your business, it is generally allowable.
Yes. Stock purchased for resale is normally deductible. This includes wholesale products, private label inventory, retail arbitrage stock and online arbitrage purchases.
Important: If stock remains unsold at year-end, adjustments may be required when preparing accounts. Many growing sellers benefit from working with specialist Amazon seller accountants who understand inventory accounting.
Many Amazon sellers start from home. HMRC allows business owners to claim a proportion of certain household costs where part of the property is used for business purposes.
Electricity
Heating
Broadband
Mortgage/Rent
Yes. Professional accountancy fees are generally tax deductible. This includes fees for bookkeeping, accounts preparation, Corporation Tax returns, Self Assessment tax returns, VAT returns and tax advice. Many Amazon sellers find that a good accountant saves more tax than they cost.
Affordable accountancy servicesMany online sellers miss legitimate expenses. Missing these can result in paying more tax than necessary.
Let's assume an Amazon seller generates £60,000 in revenue. Here's how claiming allowable expenses can dramatically reduce taxable profit.
Without claiming expenses: Taxable Profit = £60,000
After claiming expenses: Taxable Profit = £27,400
This means tax is only calculated on £27,400 rather than £60,000 — demonstrating why keeping accurate records and claiming every legitimate expense is so important.
Good bookkeeping is essential. Without proper records, you risk incorrect tax returns, missed expenses, VAT errors and potential HMRC enquiries.
Records you should retain:
How long to keep records: Most business records should be retained for at least six years.
As your Amazon business grows, you may need to consider whether operating through a limited company is more tax efficient. A limited company may provide Corporation Tax planning opportunities, salary and dividend planning, greater business credibility and limited liability protection.
Amazon sellers often encounter VAT issues sooner than expected. Factors include turnover levels, imports, international sales, Amazon FBA storage locations and marketplace reporting requirements. VAT mistakes can be expensive.
Our specialist ecommerce accountants also support sellers across multiple platforms. Explore our full range of online seller resources.
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Common questions about Amazon seller expenses in the UK
Amazon sellers can usually claim expenses that are wholly and exclusively incurred for business purposes, including Amazon fees, stock purchases, advertising, packaging, software and accountancy fees. See our full checklist above for a complete breakdown.
Yes. Referral fees, FBA fees, storage fees and monthly seller subscription fees are generally allowable expenses. These are core costs of running an Amazon business.
VAT-registered Amazon sellers may be able to reclaim VAT on qualifying business purchases. Speak to our VAT specialists for guidance.
Yes. Stock purchased for resale is normally deductible, although year-end stock adjustments may apply if inventory remains unsold.
Often yes. A proportion of household costs may be claimed where part of the property is used for business purposes. The amount depends on individual circumstances.
The business proportion of internet costs may be allowable. If you use your internet connection for both business and personal use, only the business portion can be claimed.
Yes. Accountancy fees are generally tax deductible where they relate to business activities. Learn about our affordable accountancy services.
Most business records should be retained for at least six years. This includes invoices, receipts, Amazon reports, settlement statements, bank statements and stock records.
While not mandatory, bookkeeping software can help improve accuracy and simplify tax compliance. A specialist Amazon seller accountant can advise on the best tools for your business.
Whether you sell through Amazon FBA, Amazon FBM, private label products or online arbitrage, Taxwise Accountancy can help you understand your tax position and ensure you claim every legitimate expense available. Our specialist accountants support Amazon sellers throughout the UK.
Bookkeeping
Self Assessment
Ltd Company Accounts