Running a successful e-commerce store is no easy feat. Once you’ve set up the multiple aspects of your business, it’s important to turn to the balancing of your finances. With all that juggling, carving time out to dig into your finances can be challenging, but failure to do so could cause headaches further on down the line. Having a strong understanding of tax deductions and your finances can reduce the amount you owe at the end of the year, saving you money that can be invested back into your business.
Why use Dead Simple Accounting
Dead Simple Accounting takes the hassle out of finances leaving you to focus on growing your business. Our focus is to stay involved in the entire process, right from completing your self-assessment return to filing them with HMRC. We also offer forecasting services that enable you to meet your goals, risk-free. Whether you’re looking to start your own e-commerce business or form a limited company, we can offer advice on what’s right for you every step of the way. What’s more, we’re rated 5-stars across Google and Facebook!
Our Pricing
At Dead Simple Accounting we charge just £275 including VAT for self-assessment tax returns, and can take you through the entire process.
If you’re interested in other services, such as setting up a company or payroll, head over to our quote page for a free and instant estimate.
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What Expenses Can E-commerce Businesses Claim?
Tax-deductible business expenses can contribute greatly to the growth of your business. Many online sellers miss out on valuable write-offs because of their lack of understanding of the translation of traditional deductions, to an online model. Day-to-day expenses that are recorded and reported could save you a small fortune. The following is a list of expenses an E-commerce business may be able to claim:
- Advertising and Promotion
- Any cost incurred on the promotion of your online business is deductible including the following:
- Marketing: Google Adwords, Facebook Ads, ad placements in digital and print publications, sponsored ad placements on seller platforms, email marketing software, and fees sponsored content by influencers.
- Website-related content: Hosting, plugins, stock photos, domain names, subscription website services, themes and any other purchase made for your website.
- Any cost incurred on the promotion of your online business is deductible including the following:
- Bank Fees
- The fee associated with your business bank and credit card accounts are deductible:
- ATM fees, overdraft fees, deposit fees, wire transfer fees, and monthly service fees.
- Credit card fee: Annual fees and late payment fees.
- The fee associated with your business bank and credit card accounts are deductible:
- Cost of Goods Sold
- Cost of Goods Sold, or COGS, is a special kind of expense that relates to the cost that a seller absorbs to manufacture or sell an item. This includes the following:
- Materials: Raw materials required to manufacture and sell your product such as threads, brand labels, and so on.
- Labour: Direct labour pertains to the people directly involved in the production of the product, not the people hired for selling the product.
- Inventory: Merchandise purchased to resell falls under inventory. Remember that you can only write off the cost of inventory that is sold. Unsold inventory can be considered as an asset.
- Cost of Goods Sold, or COGS, is a special kind of expense that relates to the cost that a seller absorbs to manufacture or sell an item. This includes the following:
- Home office expenses
- It’s important to keep a record of all your home office expenses. You have the liberty to write off a percentage of the following expenses:
- Renters or homeowners insurance
- Repairs to your home office space- any repair made directly to your home office is 100% deductible
- Rent or mortgage
- Utilities such as gas, electricity, and water
- It’s important to keep a record of all your home office expenses. You have the liberty to write off a percentage of the following expenses:
Need Some Further Help?
If you have any further questions or would us to help with your tax needs, get in touch with us today.
Useful Resources
These days there’s an abundance of tools and resources at your disposal, software that handles your invoices and expenses, to mobile based banks that cut the boring paperwork.
We only work with the best of the best, and have partnered with several big names to offer you various goodies when signing up.
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