SimpleReturns

Company tax returns for online sellers

Reviewed by Lee Jones, Founder · Updated 16 July 2026
The short answer

If you sell on eBay, Amazon, Etsy or your own web shop through a limited company, the filing duty is the same as for every company: a Company Tax Return to HMRC within 12 months of your year end, plus a set of accounts, even in a year you made a loss. What makes yours different is what goes into it: stock, postage and packaging, platform and payment fees, and the spare room full of boxes. And there is one trap that catches online sellers more than anyone: the money the platform pays into your bank is not your turnover, because the fees are already taken off before it arrives.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Company Tax Returns on gov.uk. Always rely on that over our summary.

What counts as your company's income?

Every sale, at the price the buyer paid. For an online-selling company that usually means:

  • Sales on each platform, added up separately for eBay, Amazon, Etsy and anywhere else you list.
  • Sales through your own website, including ones taken through a card or payment service.
  • Postage the buyer paid you. If the buyer paid £3.50 towards delivery, that £3.50 is part of the sale coming in, and the label you bought is an expense going out. Record both.

The number that matters is what the buyer paid, not what landed in your bank. Platform payouts arrive with the fees already taken off, so building your return from them quietly shrinks both your sales and your costs. There is a whole section on this trap below.

Your tax bill is then worked out on the profit, which HMRC calculates its own way rather than copying the accounts figure. Small companies pay 19% on profits up to £50,000; bigger profits move towards 25%.

One side note while we are talking about money in: if what the company sells goes over £90,000 across any rolling 12-month period (not just your accounting year), it has to register for VAT. That line is measured on your sales, so a payout total that sits just under £90,000 can hide true sales that are over it. Watch this one as you grow.

What can your company claim?

The rule behind every expense is simple: the cost must be purely for the business. If a cost is part business and part personal, only a clearly separate business part can be claimed. For an online seller the usual list looks like this:

  • Stock, counted the right way. Only the cost of the stock you actually sold this year comes off this year's profit. Stock still sitting on the shelf at your year end is not an expense yet: it counts as stock the company owns, and we ask you for that figure in plain English. The cost of the goods you did sell is the biggest expense in this trade, so keep the purchase records tidy.
  • Platform and payment fees. Listing fees, final value fees, referral fees, fulfilment charges, card and payment-service fees. These are real costs of trading even though you never see them leave the bank; they are taken off before the payout. Claim them.
  • Postage and packaging. Labels, boxes, bubble wrap, tape, courier collections and drop-offs.
  • Equipment. The label printer, the laptop, the shelving and racking that holds the stock. Bigger one-off kit like this can normally be claimed in full against profits in the year you buy it.
  • Software and subscriptions. Listing tools, stock-tracking apps, photo software for product shots.
  • Storage at home, carefully. If the spare room genuinely works as the stockroom, a clearly separate business part of your home costs may be claimable. The rules for a company are stricter than people expect, so read our guide on claiming for working from home first.
  • Insurance. Stock cover and any seller or liability insurance the business carries.

Keep the receipts and the platform statements. The claim is only as good as the paper behind it.

The trap in this trade: the payout is not your turnover

Here is the mistake that catches online sellers. Say your buyers paid £10,000 across the year. The platform took £1,500 in fees and paid £8,500 into the company's bank account. It is tempting to call £8,500 your income and move on, and the profit even comes out the same. But the return does not just ask for profit; it needs the true totals. Your sales were £10,000 and your fees were £1,500, and a return built from the payout gets both numbers wrong.

Why it matters:

  • Your sales figure would be understated, and the £90,000 VAT registration line is measured on sales, not payouts.
  • Your fees would vanish instead of being claimed as the genuine expense they are.
  • HMRC already gets a report. Since the start of 2024, platforms have had to collect their sellers' details and send HMRC a yearly report of what those sellers earned, companies included. That report is a net figure: your earnings after the platform's fees. Your return reaches the same profit a fuller way, by showing gross sales and then deducting the fees, so do not just copy the platform's net number in as your sales.

The fix: take the sales total and the fees total from each platform's own statement, and record them separately instead of letting the payout swallow both.

One honest boundary while we are here: if you import stock from abroad or sell to buyers overseas, customs and VAT questions come with that, and this guide does not cover them. For that part, an accountant genuinely earns their fee.

What does filing actually look like?

HMRC's own free filing service has closed, so every company now files through commercial software. With SimpleReturns, you upload the company's bank statement, answer a few plain-English questions (no accounting words, we promise), and check every figure on one screen before anything is sent. Because payouts land with fees already off, we ask about your platform sales so the return shows true sales and true fees. We then file both things every selling company owes: the tax return to HMRC and the accounts to Companies House. It is free to start, no card needed, and £99 flat when you file.

One deadline to respect: file late and the penalty is £200 from the very first day. Put your year end in the phone now.

Common questions

Is the money the platform pays into my bank my turnover?

No. Platform payouts arrive with the fees already taken off, so they are lower than your real sales. Your turnover is what the buyer paid, and the platform fees are a separate expense you claim.

Do I still have to file if my company made a loss?

Yes. If you sell through a limited company you must send HMRC a Company Tax Return within 12 months of your year end, plus a set of accounts, even in a year you made a loss.

Can I claim the stock I have not sold yet?

No. Only the cost of the stock you actually sold this year comes off this year's profit. Stock still sitting on the shelf at your year end counts as stock the company owns, and we ask you for that figure.

Does HMRC know what I sell online?

Since the start of 2024, platforms have had to collect their sellers' details and send HMRC a yearly report of what those sellers earned, companies included. The reported figure is your earnings after the platform fees.

When does my company have to register for VAT?

If what your company sells goes over £90,000 across any rolling 12-month period it has to register for VAT. That line is measured on your sales, not on your payouts, so watch it as you grow.

Want your shop's company return filed for you?

Upload the company's bank statement and your platform payout reports, answer a few plain-English questions, and we build the accounts and the CT600 for you. You check every figure before anything is sent, and £99 flat covers both filings: the tax return to HMRC and the accounts to Companies House.

Start your return

And if your stock crosses borders, get an accountant for the customs and VAT side first; we would rather tell you that plainly than pretend software solves it.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.