Running an e-commerce business through a limited company — whether you sell on Amazon, eBay, Etsy, or your own website — means filing a CT600 with unique challenges that general guides don't address. From stock valuation to FBA fees, VAT interactions to international sales, your CT600 requires industry-specific knowledge.

This complete guide walks Amazon sellers, eBay traders, and online retailers through everything you need to know about corporation tax filing in 2026.

Why E-commerce CT600 Filing Is Different

If you're an online seller operating through a limited company, your CT600 has complexities that service-based businesses simply don't face:

Stock valuation — you're holding inventory, and how you value it directly affects your taxable profit
Cost of goods sold (COGS) — physical products mean calculating the cost of what you actually sold, not just what you bought
VAT interactions — VAT-registered sellers need to understand how VAT affects their CT600 profit figures
Platform fees — Amazon, eBay, and other marketplace fees are deductible but need correct categorisation
International sales — cross-border VAT, customs duties, and foreign currency all create CT600 implications
FBA and fulfilment costs — Amazon FBA fees, warehouse costs, and shipping expenses have specific tax treatments
Returns and refunds — high return rates in e-commerce affect your reported turnover

If you've been filing your CT600 without an accountant, this guide helps you handle the e-commerce-specific aspects correctly.

Stock Valuation: The Most Important Number on Your CT600

For product-based businesses, stock valuation is the single biggest factor affecting your corporation tax bill. Get it wrong, and you'll either overpay tax or under-report — both are problems.

How Stock Affects Your Profit

Your CT600 trading profit is calculated as:

Turnover – Cost of Goods Sold (COGS) – Other Expenses = Trading Profit

COGS is calculated as:

Opening Stock + Purchases – Closing Stock = Cost of Goods Sold

This means: the higher your closing stock value, the lower your COGS, and the higher your profit. Conversely, writing down stock reduces profit and your tax bill.

Valuation Methods

HMRC requires stock to be valued at the lower of cost or net realisable value (NRV). But what counts as "cost"?

Cost includes:

Purchase price of goods
Import duties and customs charges
Shipping costs to get goods to your warehouse or FBA centre
Any direct costs of bringing the product to a sellable condition (e.g., packaging, labelling)

Cost does NOT include:

Storage costs after goods are in your warehouse
Marketing or advertising costs
Admin overheads

Net Realisable Value (NRV): If stock is slow-moving, damaged, or obsolete, NRV is the expected selling price minus selling costs. You must write stock down to NRV if it's lower than cost.

Practical Example

Scenario	Opening Stock	Purchases	Closing Stock	COGS	Turnover	Gross Profit
Low closing stock	£5,000	£50,000	£3,000	£52,000	£80,000	£28,000
High closing stock	£5,000	£50,000	£15,000	£40,000	£80,000	£40,000

Same purchases, same turnover — but £12,000 difference in profit depending on closing stock. This directly affects your Box 155 trading profit and your corporation tax bill.

Year-End Stock Counts

You must conduct a stock count at your accounting year end. This applies whether stock is:

In your own warehouse/spare room
At an Amazon FBA warehouse
In transit from suppliers
At a third-party fulfilment centre

For FBA sellers: Amazon provides inventory reports showing exactly what's in their warehouses at any date. Download the "Inventory Adjustments" and "Monthly Storage" reports to support your valuation.

Pro tip: If stock has been sitting in FBA for over 180 days and hasn't sold, it's likely worth less than cost. Write it down to NRV — this legitimately reduces your CT600 tax liability.

Platform Fees and Commissions: Deducting Your Selling Costs

Amazon, eBay, and other platforms charge significant fees. All of these are deductible business expenses on your CT600:

Amazon Fees

Referral fees (typically 8-15% of sale price) — fully deductible
FBA fulfilment fees (pick, pack, and ship per unit) — fully deductible
Monthly storage fees — fully deductible
Long-term storage fees (for inventory over 365 days) — fully deductible
Amazon Advertising (PPC) costs — fully deductible as marketing expense
Professional selling plan (£25/month) — fully deductible
Removal/disposal order fees — fully deductible
Returns processing fees — fully deductible

eBay Fees

Final value fees (typically 10-13% of total sale amount) — fully deductible
Insertion (listing) fees — fully deductible
eBay store subscription — fully deductible
Promoted listings fees — fully deductible as advertising
PayPal/payment processing fees — fully deductible

Other Platform and Payment Fees

Etsy listing fees, transaction fees, payment processing — fully deductible
Shopify subscription and transaction fees — fully deductible
Stripe/PayPal/card processing fees — fully deductible
Domain and hosting costs for your own website — fully deductible

How to Record These on Your CT600

Platform fees typically fall under "cost of sales" or "selling expenses" in your accounts. Both reduce your trading profit:

Cost of sales: FBA fulfilment fees, referral fees, payment processing fees
Selling expenses: Advertising, PPC, promoted listings
Admin expenses: Platform subscriptions, software tools

The categorisation affects your accounts presentation but not your CT600 tax calculation — all are deductible either way.

VAT and Corporation Tax: How They Interact

If you're VAT-registered (mandatory once turnover exceeds £90,000), understanding the VAT/CT600 interaction is essential. Many e-commerce sellers get this wrong.

The Golden Rule

Your CT600 figures should be VAT-exclusive (net of VAT). This means:

Turnover on your CT600 = sales excluding VAT
Purchases and expenses on your CT600 = costs excluding the VAT you've reclaimed
VAT itself is not a cost or income — it's a pass-through

Where It Gets Complicated

Irrecoverable VAT: If you have some exempt or non-business activities, you may not be able to reclaim all your input VAT. Any irrecoverable VAT becomes part of the cost for CT600 purposes.

Flat Rate VAT Scheme: If you use the Flat Rate VAT Scheme, the surplus (difference between VAT charged and flat rate paid) is taxable income on your CT600. For e-commerce sellers on the 7.5% goods rate, this can be significant.

However, most e-commerce sellers are classified as "limited cost traders" if their cost of goods is less than 2% of turnover or under £1,000 per quarter. Limited cost traders pay 16.5% flat rate, which substantially reduces the VAT surplus.

VAT on Amazon/eBay fees: Amazon and eBay charge VAT on their fees. If you're VAT-registered, you reclaim this VAT — and record the net fee amount on your CT600. If you're not VAT-registered, the gross (VAT-inclusive) fee is your deductible expense.

International Sales and VAT

Selling to EU countries or other international markets creates additional VAT complexity:

EU sales — since Brexit, sales to EU consumers may require VAT registration in the destination country via One-Stop Shop (OSS) or Import One-Stop Shop (IOSS)
Sales to non-EU countries — generally zero-rated for UK VAT purposes (good for your VAT return, neutral for CT600)
EU VAT paid — if you're registered for VAT in EU countries, those costs are separate from your UK CT600, but the EU compliance costs are deductible

For detailed VAT/CT600 interaction, see our VAT registration and corporation tax guide.

International Sales and Currency: CT600 Implications

E-commerce sellers often sell internationally. Here's how this affects your CT600:

Foreign Currency Transactions

If you receive payments in foreign currencies (USD, EUR, etc.):

Convert to GBP at the exchange rate on the date of the transaction (or use HMRC's monthly average rates)
Exchange rate gains or losses are taxable/deductible on your CT600
If Amazon pays you in GBP after converting from foreign currency sales, the GBP amount received is your income — Amazon's conversion rate applies

International Shipping and Customs

Customs duties on imported goods — part of the cost of stock (included in stock valuation)
International shipping costs to customers — deductible selling expense
Anti-dumping duties — if applicable, part of stock cost
Customs agent fees — deductible administrative expense

Transfer Pricing (if applicable)

If you have related companies in other countries (e.g., a sourcing company in China), transfer pricing rules may apply. Transactions must be at arm's length. This is advanced territory — seek specialist advice if relevant.

Reporting on Your CT600

International sales are included in your total turnover figure. You don't need to separately identify international vs domestic sales on the CT600 itself, but your accounting records should clearly distinguish them.

If you have overseas income through a foreign permanent establishment, additional CT600 boxes and potentially supplementary pages apply.

Amazon FBA-Specific Tax Considerations

If you use Fulfilment by Amazon (FBA), several unique tax issues arise:

Pan-European FBA and Stock Location

Amazon's Pan-European FBA programme moves your stock across EU warehouses (Germany, France, Italy, Spain, Poland, Czech Republic). Post-Brexit implications:

Stock moved to EU warehouses is an export from the UK, followed by an import into the EU country
This can trigger VAT registration obligations in those EU countries
On your CT600, the costs of Pan-European compliance (VAT registrations, filings) are deductible
The stock remains your company's asset regardless of location — include it in your closing stock valuation

FBA Long-Term Storage and Stock Write-Downs

Amazon charges long-term storage fees for inventory stored over 365 days. Items subject to these fees are often slow-moving or obsolete:

Storage fees — deductible on your CT600
Stock write-down — if items are unlikely to sell at cost, write them down to NRV
Removal or disposal costs — deductible
Destroyed inventory — deductible as a loss, removed from closing stock

Amazon Reimbursements

Amazon sometimes loses, damages, or fails to account for your stock. When they reimburse you:

The reimbursement is income on your CT600
Remove the reimbursed items from your stock count
If the reimbursement exceeds the cost of the items, the excess is taxable profit
If it's less than cost, the shortfall is a deductible loss

Amazon Lending

Amazon offers loans to sellers. If your company takes an Amazon loan:

Interest payments are deductible on your CT600
The loan itself is a liability on your balance sheet
Repayments of the principal are not deductible (they're balance sheet movements)

E-commerce Expenses: The Complete Deductibility List

Beyond platform fees and stock costs, here's what e-commerce sellers can claim on their CT600:

Product Sourcing and Development

Sample costs (successful products — add to stock cost; unsuccessful — write off)
Product photography and videography
Product design and branding costs
Prototype costs
Quality testing and certification (CE marking, etc.)

Marketing and Advertising

Amazon PPC (Sponsored Products, Sponsored Brands)
Google Ads, Facebook/Instagram ads
Influencer marketing payments
Social media management tools
Email marketing software (Mailchimp, Klaviyo)
SEO tools and services

Software and Tools

Inventory management (e.g., Linnworks, ChannelAdvisor)
Repricing software (RepricerExpress, etc.)
Accounting software (Xero, FreeAgent, QuickBooks)
Product research tools (Jungle Scout, Helium 10)
Keyword research and listing optimisation tools

Fulfilment and Shipping

Packaging materials (boxes, tape, labels, tissue paper)
Postage and delivery costs (Royal Mail, DPD, Hermes)
Warehouse rent (if using your own warehouse)
Warehouse equipment — claim via capital allowances
Home office costs if you pack orders from home

Insurance

Product liability insurance — essential and deductible
Stock insurance — deductible
Business interruption insurance — deductible
Employer's liability (if you have staff) — deductible

Staff Costs

Employee wages and salaries — deductible (including your own director's salary)
Employer NIC — deductible
Freelancer/VA costs (virtual assistants, customer service) — deductible
Pension contributions — deductible

For the complete list of what you can and can't claim, see our allowable expenses guide and disallowable expenses guide.

Corporation Tax Rates for E-commerce Companies (2025/26)

Your CT600 liability depends on your profit level:

Profit Level	Rate	Effective Rate with Marginal Relief
Up to £50,000	19%	19%
£50,001 – £250,000	Marginal relief applies	19% to 25% (blended)
Over £250,000	25%	25%

The £50,000 threshold matters — many growing e-commerce businesses push through this level. At £60,000 profit, marginal relief means an effective rate of about 19.75%. At £100,000, it's about 21.5%.

Check for associated companies — if you (or family members) have other companies, the thresholds are divided.

Use our corporation tax calculator to see exactly what you'll owe.

Year-End Planning for E-commerce Companies

E-commerce businesses have unique year-end planning opportunities:

Stock Management

Slow-moving stock — identify items to write down to NRV before year end
Dead stock — dispose of or donate unsellable inventory and claim the loss
Stock count timing — plan your year-end stock count carefully, especially for FBA inventory

Timing of Purchases

Pre-year-end stock purchases increase closing stock AND purchases — neutral effect if stock is still held
Equipment and software purchases before year end can be claimed via capital allowances or AIA
Annual subscriptions paid before year end — deductible in the current period

Profit Extraction

Review your dividend vs salary split before year end
Consider pension contributions to reduce taxable profit
Reconcile your directors' loan account — avoid Section 455 tax on overdrawn balances

Loss Utilisation

If your company made a loss (common in early-stage e-commerce), review the loss carry-forward and carry-back options. A loss in this period could be carried back to get a refund of last year's corporation tax.

See our year-end planning tips for the complete checklist.

Filing Your E-commerce CT600: Step by Step

Step 1: Reconcile Sales and Income

Download settlement reports from Amazon Seller Central, eBay, and other platforms
Match total settlements to bank deposits — they should reconcile
Account for pending disbursements at year end (money Amazon/eBay holds)
Include refunds and chargebacks as deductions from turnover

Step 2: Calculate Cost of Goods Sold

Opening stock (from last year's closing stock)
Add: purchases of inventory during the period (cost price including shipping and duties)
Less: closing stock (from your year-end stock count and FBA inventory report)
Equals: COGS

Step 3: Compile Expenses

Categorise all expenses:

Platform fees and commissions
Advertising and marketing
Shipping and fulfilment
Software and subscriptions
Staff costs (including director salary and employer NIC)
Professional fees (accountancy, legal)
Office/home office costs
Insurance
Bank charges

Step 4: Prepare Accounts and CT600

Your accounts need to follow FRS 105 or FRS 102 and be converted to iXBRL format for filing.

On the CT600:

Box 145 — trading profit before capital allowances
Box 155 — trading profit after capital allowances
Box 235 — total profits chargeable to corporation tax
Box 440 — corporation tax payable

See our CT600 box-by-box guide for all sections.

Step 5: File and Pay

File within 12 months of your accounting period end
Pay within 9 months and 1 day
Don't miss the deadline — penalties start at £100

Common E-commerce CT600 Mistakes

Avoid these pitfalls that trip up online sellers:

Not doing a proper stock count — estimating closing stock leads to inaccurate COGS and incorrect tax
Including VAT in CT600 figures — if you're VAT-registered, all CT600 numbers should be VAT-exclusive
Forgetting FBA stock — stock at Amazon warehouses is still your asset; include it in closing stock
Not writing down slow-moving stock — holding dead stock at full cost overstates profit and overpays tax
Confusing cash received with revenue — use accruals basis, matching sales to the period they occur, not when Amazon/eBay pays you
Missing deductible expenses — PPC costs, sample costs, and subscription tools are all deductible
Ignoring exchange rate gains/losses — if you sell in USD or EUR, currency movements are taxable/deductible
Mixing personal and business expenses — keep separate bank accounts and records

For more common errors, see our CT600 common mistakes guide.

FAQ: CT600 for Amazon/eBay Sellers

How do I value my closing stock for the CT600?

Value each item at the lower of cost or net realisable value (NRV). Cost includes purchase price, shipping to your warehouse, and customs duties. NRV is the expected selling price minus selling costs (platform fees, shipping). For slow-moving or damaged stock, NRV is likely lower than cost.

Are Amazon FBA fees deductible on my CT600?

Yes. All Amazon fees — referral fees, FBA fulfilment fees, storage fees, advertising costs, removal fees, and Professional selling plan costs — are fully deductible business expenses on your CT600.

Do I include Amazon/eBay as turnover even though they take fees before paying me?

Yes. Your gross sales figure (the total amount customers paid) is your turnover. The platform fees are a separate expense. Don't report just the net amount you receive — report the full sale price as turnover and the fees as a cost of sales.

How does VAT affect my CT600?

If you're VAT-registered, report all CT600 figures net of VAT (excluding VAT). VAT is not income or an expense — it's collected for HMRC. If you're on the Flat Rate VAT Scheme, the surplus is taxable income. If you're not VAT-registered, report everything inclusive (because there's no VAT to exclude).

What if I have unsold stock from years ago?

Review it honestly. If stock is genuinely unsellable or would only sell at a loss, write it down to its net realisable value (possibly zero for truly obsolete items). This reduces your closing stock, increases COGS, and legitimately lowers your corporation tax. Document the write-down with evidence of why the stock is impaired.

Can I claim the cost of products I give away or use for samples?

Products given as promotional samples are a deductible marketing expense. Products you take for personal use are not deductible — they should be removed from stock at cost price (and potentially treated as a benefit in kind or dividend).

How do I handle returns and refunds on my CT600?

Returns reduce your turnover. If you report gross sales of £100,000 and had £5,000 in refunds, your CT600 turnover is £95,000. Returned stock goes back into closing stock at its original cost (or NRV if it can only be sold as "used" or "refurbished" at a lower price).

Do I need an accountant for my e-commerce CT600?

Not necessarily. Many e-commerce directors file their own CT600 using software like Taxpipe. The key is understanding stock valuation and keeping accurate records. If your situation involves multiple countries, complex supply chains, or very high turnover, an accountant may add value.

What's my CT600 filing deadline?

Your CT600 is due 12 months after your accounting period end. Corporation tax payment is due 9 months and 1 day after your period end. Example: year ending 31 March 2026 → file by 31 March 2027, pay by 1 January 2027. See our deadlines calendar.

Can I carry forward losses from my early trading years?

Yes. If your e-commerce company made trading losses (common in the first year or two while building the business), these can be carried forward indefinitely against future trading profits. You can also carry losses back one year to reclaim previously paid corporation tax.

File Your E-commerce CT600 with Taxpipe

You've sourced the products, optimised the listings, managed the inventory, and handled the customer service. Now you need to file your CT600 — and you shouldn't need to pay an accountant £1,000+ to do it.

Taxpipe is built for e-commerce company directors:

£59 flat fee — the same price whether you sell 100 or 100,000 items. See pricing →
Stock and COGS handling — our guided flow helps you report inventory correctly
HMRC-recognised — files your CT600 directly to HMRC via secure API
iXBRL accounts included — no separate charge for statutory accounts
Plain English guidance — designed for business owners, not accountants
Fast filing — most sellers complete in under 20 minutes

You've built the business. You've kept the records. Let Taxpipe handle the tax filing.

Start filing your e-commerce CT600 →

Not sure what you'll owe? Try our corporation tax calculator first.

This guide provides general information about corporation tax for e-commerce businesses and does not constitute tax advice. Complex international structures, multi-country VAT obligations, and transfer pricing situations may require specialist professional advice. For straightforward e-commerce company CT600 filing, Taxpipe makes it simple at £59.