Do You Enter Gross Sales or Money Received After Platform Fees on Your Self Assessment?
If you’re a sole trader completing a Self Assessment tax return in the UK, you might wonder whether to report your total sales before deductions (gross sales) or the money you actually receive after platform fees and other charges.
What Should You Report?
When filling in your Self Assessment tax return, you should generally report your gross sales income—that is, the total amount you charged customers before any fees or commissions are deducted. This means the full amount you invoiced or earned from your trade, not just the money that ends up in your bank account.
For example, if you sell goods or services through an online platform that takes a 10% commission, and you receive £900 after fees, but the total sales value was £1,000, you should report the full £1,000 as income.
Why Report Gross Sales?
Reporting gross sales aligns with how HM Revenue & Customs (HMRC) expects you to keep your records and calculate your taxable income. Your expenses, including platform fees or commissions, are then recorded separately as allowable business expenses. This approach ensures that your profit—income minus expenses—is accurately calculated for tax purposes.
How to Handle Platform Fees
Platform fees, commissions, or other charges deducted before you receive payment are treated as business expenses. You should keep clear records of these fees, such as invoices or statements from the platform, so you can claim them as allowable expenses on your tax return.
Summary with a Practical Example
- Gross sales: £1,000 (total charged to customers)
- Platform fees: £100 (commission taken by the platform)
- Net money received: £900 (paid into your account)
On your Self Assessment, report £1,000 as income. Then, include the £100 platform fees as a business expense. This way, your taxable profit reflects your true earnings.
Exceptions and Special Cases
If you operate on a cash basis for your accounting—meaning you record income and expenses when money actually changes hands—your approach may differ. However, most sole traders use the accruals method, recording income when earned and expenses when incurred.
If you are unsure which accounting method applies to you or how to treat specific fees, it is advisable to check HMRC guidance or consult a professional.
Official reference: https://www.gov.uk/self-assessment-tax-returns. Always check the latest official guidance. Related forms: Browse our form category.
Important: This article provides general information. Government rules, forms and procedures can change, and this article may not reflect the latest updates. Check current GOV.UK guidance or the relevant authority before relying on it. ITG & Co. is independent and is not affiliated with a government department.