Shopify sellers: the camera and laptop come off the profit

A Shopify seller who trades as a sole trader can deduct the full cost of a camera, a laptop or a set of shelves in the tax year they pay for it. It does not have to be spread over several years. Some new sellers leave these off the return because they think of them as purchases rather than expenses.

Equipment is an expense on the cash basis

Since April 2024 the cash basis has been the standard way for sole traders and partnerships to work out their profit. Under it, HMRC says, equipment you buy to keep and use in the business is claimed as a normal allowable expense, not as a capital allowance. Its own examples are machinery, computers and vans.

Cars are the exception. A car bought for the business goes through capital allowances instead, unless you use the simplified mileage rate for it.

What counts for a Shopify shop

• A camera, lenses, lighting, backdrops and a tripod for product photographs.

• A laptop or tablet, a label printer and parcel scales.

• Shelving, a packing bench and storage boxes for stock.

• A van, if you deliver or collect stock yourself.

Your Shopify plan and paid apps are ordinary running costs in any case. HMRC treats software you pay for on a regular renewal as an expense, even if you use it for years.

Personal use cuts the claim

If you also use something privately, you can only claim the business share. HMRC's guide to self-employed expenses uses a phone bill split between personal and business calls as its example. A laptop that runs the shop by day and streams films at night works the same way. Estimate the business share honestly and keep a note of how you reached it.

The trading allowance is the other catch. If you use the £1,000 trading allowance instead of your actual costs, you cannot claim any of this. The Budget on 28 October announced a rise in the allowance to £3,000 from 6 April 2027, subject to the Finance Bill, which will make that choice closer for very small shops. For a seller who has just bought equipment, actual costs usually win.

A first year, costed

Illustration, not a real client. Leah sells hand-poured candles on Shopify from Walthamstow. She has no other income, and her profit for 2026 to 2027 before any equipment is £30,000. During the year she pays for:

• a camera, £900, and lighting and backdrops, £250;

• a laptop, £1,400, used about 70 per cent for the shop, so £980 is claimable;

• steel shelving, £320, and a label printer, £180.

That is £2,630 of equipment, all deductible in 2026 to 2027. Her profit falls to £27,370. With Income Tax at 20 per cent and Class 4 National Insurance at 6 per cent on profit above £12,570, her bill drops from £4,531.80 to £3,848. The equipment saves her £683.80 of tax for 2026 to 2027.

If you trade through a company

A limited company cannot use the cash basis. It claims the same kit through capital allowances, and the £1 million Annual Investment Allowance covers most small companies in full in the year of purchase. Private use of company equipment raises its own questions for the director, so check before buying a laptop through the business.

What to keep

• The receipt or invoice, showing the date you paid.

• A one-line note of the business share for anything you also use at home.

• The card or bank statement, if the receipt is in a personal email account.

Our page for online sellers sets out how we pull Shopify payouts, fees and costs into one set of books. Before your next return, go through this year's bank and card statements and list everything you bought for the shop that will last more than a year.

About the author

Harvey Dhillon is Founder and CEO of Zmartly, an accountancy firm for ecommerce sellers. He grew up in West London and began his career in finance at Barclays, in investment banking and wealth management, before going full-time on Zmartly in 2020.

Featured photo by Castorly Stock on Pexels.