Costs of Eccommerce site

[BeMarketed]

Hello,

Just a couple of quick questions that I couldn't find an answer to so far...

If I sell goods online can I claim back the costs for postage, ebay/ Amazon fees? My margin is pretty healthy on the products however if I can't claim these back then there isn't much point in me proceeding with this.

Example:
Buy product wholesale @ £10
Sell online @ £20
Profit = £10

If I can claim the costs back does that mean my profit is still £10? Do I have to wait until the end of the tax year to claim these back?

 

[Ninja Commerce]

What do you mean by "claim back" exactly?

Assuming you are a sole-trader (as opposed to having a limited company) then you will have to self-assess to pay tax.

If you are also employed then chances are that you will owe some amount of tax on your business profits.

You need to self assess each year, and the tax bill will be based on your profit.

So in your example:

you would pay tax on the £10 profit that you made.

your profit is worked out before tax. So on your self assessment form you simply enter the total revenue in the relevant time period and the total costs (including any overheads).

If your business makes a profit then you will owe tax (unless you total income from business + employment is less than your income allowance, which is about £9k)

 

[Paul Norman]

You can claim all distribution costs against your profit.

 

[BeMarketed]

Thanks I thought as much but wanted to be sure!

 

[Martinly Tran]

Thanks for your sharing

 

[MyBusinessStory.co.uk]

Paul Norman is right you can include the cost of shipping in your accounts against your profit but if your talking about claiming tax back from your postage then no, there is no VAT on postage costs with royal mail, unless you want it delivered on a sat.

correct me if i'm wrong

 

[Jenever]

As far as I'm aware you are right about VAT postage costs

 

[Raw Rob]

Paul Norman is right you can include the cost of shipping in your accounts against your profit but if your talking about claiming tax back from your postage then no, there is no VAT on postage costs with royal mail, unless you want it delivered on a sat.

It's only Royal Mail that didn't charge VAT, other courier companies have always charged VAT. And now Royal Mail charge VAT on some services, particularly if you have a business account with them.

(Although I don't think the op was talking about VAT.)