Depop Tax Deductions: Every Expense You Can Claim

When it comes to tax, you do not pay on total sales. You pay tax on profit, which means sales minus allowable expenses. The more legitimate business expenses you record, the more accurate your profit figure becomes.

This guide walks through the main expenses Depop sellers can claim in the UK, from stock and postage to home office costs, software and mileage.

How Do Tax Deductions Work for Depop Sellers?

When you file your Self Assessment tax return, you report:

• Total sales: your gross income before fees and expenses.
• Allowable expenses: costs directly related to running your Depop business.
• Taxable profit: sales minus allowable expenses.

You only pay Income Tax and National Insurance on your profit, not your total Depop sales.

What Expenses Can Depop Sellers Claim?

HMRC allows self-employed sellers to claim costs that are wholly and exclusively for business. If something is partly personal and partly business, you can only claim the business proportion.

1. Inventory and Stock Costs

Anything you buy specifically to resell through your Depop shop is usually a business cost.

• Charity shop and thrift shop purchases.
• Vintage sourcing trips and markets.
• Wholesale stock from suppliers.
• Bulk clothing lots from auctions or online sellers.
• Fabric, trims and materials if you make, customise or alter items.
• Cleaning, repairs or alterations needed to make stock saleable.

Keep receipts wherever possible. If you buy from a market or car boot sale and cannot get a formal receipt, make a note of the date, place, seller, items bought and amount paid.

2. Packaging Materials

Packaging costs are usually fully deductible when used for Depop orders.

• Mailing bags, poly mailers and padded envelopes.
• Boxes, tape and labels.
• Tissue paper and wrapping materials.
• Branded stickers and thank you cards.
• Printer ink and label printing costs.

3. Postage and Shipping

Every business postage cost should be recorded.

• Royal Mail postage, including tracked and signed-for services.
• Courier services such as Evri, DPD, Yodel or similar.
• International shipping costs.
• Parcel collection charges.
• Return postage where you pay it as part of the business.

If buyers pay you separately for shipping, that amount is income. You then claim the actual shipping cost as an expense.

4. Platform and Payment Fees

Depop and payment providers charge fees on transactions. These are business costs.

• Depop seller fees.
• Payment processing fees.
• PayPal fees where relevant.
• Currency conversion fees for international sales.
• Boosted or promoted listing costs.

Download reports from Depop, PayPal and your payment provider so the figures are exact rather than estimated.

5. Photography and Listing Equipment

Good photos sell clothes. Equipment used to photograph, style and list stock can be claimable.

• Ring lights and lighting equipment.
• Phone tripods and camera stands.
• Backdrops and photography backgrounds.
• Clothes rails and hangers used for listing.
• Mannequins or dress forms.
• Photo editing software such as Lightroom, Canva Pro or Adobe tools.

If equipment is used personally as well as for the business, claim only the business-use percentage.

6. Marketing and Advertising

If you spend money promoting your Depop shop, that cost is normally deductible.

• Promoted or boosted listings on Depop.
• Instagram, TikTok, Facebook or Google ads.
• Influencer collaborations or paid shoutouts.
• Website domain and hosting costs.
• Email marketing and social media scheduling tools.
• Brand design, logos or templates for your shop.

7. Storage and Workspace Costs

If your stock needs storage, those costs can be part of your business expenses.

• Clothing racks and shelving units.
• Storage boxes and organisers.
• External storage units rented for stock.
• Desk, chair or workspace equipment used for business admin.

8. Home Office Expenses

If you run your Depop shop from home, you may be able to claim a proportion of household costs. There are two common approaches.

Simplified Method

HMRC allows simplified expenses for working from home if you work from home for enough hours. The flat rate depends on the number of hours worked from home each month. You can check the current rates on HMRC's working from home simplified expenses page.

Actual Costs Method

You can instead claim a fair business proportion of actual household costs, such as:

• Rent or mortgage interest, not capital repayments.
• Council Tax.
• Gas, electricity and water.
• Internet and phone bills.
• Home insurance where relevant.

The calculation should be reasonable and based on space and time used for business. For example, if one room is used partly for photographing, packing and admin, you would calculate the business proportion rather than claiming the whole room cost.

9. Software and Subscriptions

Software used for your Depop business can be claimed.

• Accounting software such as Xero, QuickBooks or FreeAgent.
• Receipt apps such as Hubdoc or Dext.
• Inventory management tools.
• Design software such as Canva or Adobe.
• Scheduling or automation tools.
• Business email, cloud storage and domain costs.

10. Travel and Vehicle Costs

Business travel can be claimed where it relates to your Depop shop.

• Mileage to buy stock from charity shops, markets or wholesalers.
• Trips to the post office or courier drop-off point.
• Public transport for sourcing trips.
• Parking costs for business journeys.
• Travel to business events, fairs or supplier meetings.

Many sellers use HMRC's simplified mileage rates for business journeys. You can check the current rates on HMRC's simplified vehicle expenses page. Keep a mileage log with the date, destination, miles and business purpose.

11. Professional Services

Professional help connected to your business is usually deductible.

• Accountancy fees.
• Bookkeeping support.
• Legal fees related to the business.
• Professional memberships or subscriptions related to your trade.
• Business coaching or training directly linked to running your shop.

12. Banking and Finance Costs

Banking costs can be claimed where they relate to the business.

• Business bank account fees.
• Interest on business loans or credit cards.
• Transaction charges.
• Currency conversion charges.
• Payment platform fees.

What You Cannot Claim

Not everything is deductible. HMRC will not usually allow:

• Clothes bought for personal use, even if they appear in photos.
• Meals and entertainment, unless they meet specific business travel rules.
• Fines and penalties.
• Personal expenses unrelated to the business.
• Mortgage capital repayments.
• Everyday makeup, hair, nails or grooming.
• Subscriptions used mainly for personal entertainment.

The test is simple: is the cost wholly and exclusively for your Depop business? If not, do not claim it in full.

How to Keep Track of Your Expenses

Keep every receipt

Save digital or physical copies of all receipts. HMRC can ask for proof, so make sure your records show what you bought, when, how much it cost and why it was for business.

Use accounting software

Xero, QuickBooks, FreeAgent or a well-kept spreadsheet can help you track income and expenses in real time. At Simplr, we usually recommend Xero and Hubdoc for sellers who want clean, cloud-based bookkeeping.

Separate business and personal

A separate bank account for Depop income and expenses makes everything easier. You will spend less time untangling personal purchases at tax time.

Review monthly

Do not wait until the Self Assessment deadline to sort your records. A monthly review keeps your profit clearer and helps you spot missing receipts early.

How Much Can Expenses Reduce Your Tax?

Here is a simple example:

• Depop sales: £15,000.
• Stock purchases: £4,000.
• Packaging and postage: £1,000.
• Platform and payment fees: £500.
• Equipment and marketing: £500.
• Home office and storage costs: £1,000.

Total expenses are £7,000, leaving taxable profit of £8,000. Without those expenses, the tax calculation would be based on the full £15,000. The real saving depends on your tax band and National Insurance position, but the principle is always the same: accurate expenses mean a more accurate tax bill.

Get Professional Help with Your Depop Taxes

At Simplr Accounting, we specialise in helping UK Depop sellers claim the right expenses and reduce tax legally.

We can handle bookkeeping, Self Assessment and tax planning so you can focus on sourcing stock, listing items and growing your shop.