Can I claim expenses for business-related postage and packaging?

Understanding what “postage and packaging” means for expense claims

Business-related postage and packaging is one of those everyday costs that feels obvious—until you try to record it properly. In simple terms, it covers the costs you incur to send items or documents for business purposes, and the materials and services needed to prepare those items for delivery. That might include shipping a product to a customer, mailing signed paperwork to a supplier, or sending promotional materials as part of a marketing campaign. “Packaging” can refer to the physical materials used to protect and present what you send (like boxes, padded envelopes, tape, labels, and protective fill), and “postage” can include the delivery charge itself (like stamps, courier fees, tracked shipping, or international carriage).

The key idea for claiming any business expense is the same: the cost must be incurred wholly and exclusively for business purposes. If you can demonstrate that the postage and packaging was needed for your trade, profession, or business activity, it is usually claimable. However, the moment there’s personal use mixed in—sending personal parcels, mailing gifts unrelated to the business, or shipping personal items to a friend—the position changes. You may still be able to claim part of the cost, but only the portion that relates to the business use, and only if the split is reasonable and supported by evidence.

The short answer: yes, if it’s genuinely business-related

In most cases, you can claim expenses for business-related postage and packaging. For many businesses—especially e-commerce sellers, tradespeople, consultants, and service providers—shipping and mailing costs can be a routine part of delivering goods, fulfilling contracts, or handling administrative requirements.

Where people often get stuck is not whether the cost is allowed, but how to treat it correctly. Is it a direct cost of sales? Is it an overhead? Should it be included in the price of goods sold? Is it reclaimable if you’re registered for VAT? Does the cost become disallowable if it includes personal mail? What if you buy stamps in bulk and use them over several months? What if you charge customers for delivery?

The good news is that these questions can be handled with clear categorisation and consistent record-keeping. Even if your business is small, it’s worth adopting a method that keeps you organised, because postage and packaging can add up quickly and can be easy to under-claim or mis-claim.

What types of postage and packaging costs are usually claimable?

There are many common costs that normally fall within business postage and packaging. Here are typical examples that are often claimable when incurred for business purposes:

Postage and shipping fees: stamps, standard mail charges, tracked and signed-for services, recorded delivery, courier fees, same-day delivery services, international postage, and shipping insurance purchased for business shipments.

Packaging materials: cardboard boxes, mailing bags, padded envelopes, bubble wrap, packing paper, foam inserts, void fill, tape, dispensers, strapping, shrink wrap, labels, label rolls, address stickers, and branded packaging that is used to send orders or business materials.

Fulfilment and dispatch costs: fees charged by third-party logistics providers for picking, packing, and shipping orders, including the packaging used as part of that service (where itemised or included in the fulfilment fee).

Administrative mailing costs: sending contracts, invoices, legal documents, tender packs, certification paperwork, and other business correspondence.

Returns shipping: costs to send replacement items, return faulty stock to suppliers, or provide customer returns labels, where this is part of your business policy or contractual obligation.

These costs generally sit comfortably within the concept of “business expenses,” provided they are incurred as part of operating the business and are supported by receipts, invoices, or other records.

Delivery charged to customers: can you still claim the expense?

A common confusion is: “If I charge customers for postage, can I still claim the cost?” In most bookkeeping setups, yes. The charge to the customer is income, and the postage you pay is an expense. If you charge exactly what it costs, they may net off in profit terms, but they’re still separate flows.

For example, you might sell an item for £30 and charge £4 for delivery. Your sales income is £34. If you pay £3.20 to ship it and spend £0.50 on packaging, you have £3.70 of expenses related to fulfilling that order. Your delivery income (£4) is not “cancelling” your ability to claim the cost; it’s simply part of your revenue model. The important part is recording both sides properly so your accounts reflect reality.

Some businesses choose to treat shipping as part of cost of sales (particularly if shipping is essential to delivering the product). Others treat it as a separate expense line such as “Postage, shipping and delivery.” Either can be acceptable in practice as long as you are consistent and your approach makes sense for your business.

Business vs personal use: what happens if it’s mixed?

The “wholly and exclusively” rule is where mixed-use costs can cause trouble. Postage and packaging are easy to mix because stamps and packaging materials are often bought in bulk and used as needed. If you buy a roll of stamps or a stack of padded envelopes and sometimes use them for personal mail, you cannot claim the full cost as a business expense.

There are two practical ways to handle mixed use:

Method 1: Keep business and personal supplies separate. This is the cleanest approach. You maintain a business-only stash of labels, envelopes, boxes, and stamps, and you avoid using them for personal mail. If you do this consistently, it’s much easier to justify claiming the full cost of the business supplies.

Method 2: Apportion the cost fairly. If separation is not realistic, you can claim the business portion only. For example, if you buy 100 stamps and 80 are used for business mail, you might claim 80% of the cost. The split must be reasonable and you should have some support for it—like a postage log, shipment records, or at least a consistent method that reflects how you actually use the supplies.

If you cannot reasonably justify a business proportion, it’s safer to under-claim than to guess. A basic record-keeping habit (even a simple spreadsheet of shipments and mailings) can protect you and help you claim what you’re entitled to.

Different business structures: sole traders, partnerships, and limited companies

Whether you can claim business-related postage and packaging doesn’t usually hinge on your structure, but the way you record and evidence it can differ slightly.

Sole traders: You typically claim allowable business expenses against your business income. You need to demonstrate that postage and packaging costs are business-related, and you must exclude personal use. Because sole traders often pay from personal accounts, it’s especially important to keep receipts and record what each payment relates to.

Partnerships: Similar to sole traders, but the partnership accounts track expenses and the partners share profits. Clear records matter, especially if multiple partners incur postage costs separately.

Limited companies: The company claims expenses it incurs in running its trade. If a director pays for postage personally and the company reimburses them, it’s typically treated as a company expense (with the reimbursement recorded properly). If the company doesn’t reimburse, the payment may be treated differently depending on how you account for it, so it’s usually best to use company funds or follow a clear expense reimbursement process.

In all cases, the principle is the same: the expense must relate to the business and be supported by records.

What records should you keep to support the claim?

Postage and packaging is one of those categories where people sometimes rely on bank statements alone. A bank statement can show you paid a courier or bought supplies, but it often doesn’t show what the cost was for. Good evidence makes your expense claim robust.

Helpful records include:

Receipts and invoices from couriers, postal services, fulfilment providers, and packaging suppliers.

Shipment confirmations such as online postage labels, order dispatch emails, tracking numbers, and proof of delivery where applicable.

Customer order records that show the sale and delivery requirement (especially if you sell physical goods).

Returns documentation for customer returns labels and supplier returns, showing why the shipment happened.

A postage log (optional but useful) summarising date, recipient type (customer/supplier/other), purpose, and cost.

Digital record-keeping is usually fine as long as the records are clear, legible, and can be produced if required. If you buy packaging materials frequently, keeping supplier invoices and linking them to stock or dispatch activity can be helpful.

Postage and packaging for online sellers and e-commerce businesses

If you sell products online, postage and packaging costs may be among your most regular expenses. The volume of shipments can be high, costs can vary by destination and service level, and you may use a mix of couriers, marketplaces, and fulfilment providers. This makes it important to choose an approach you can stick with.

Many e-commerce businesses treat shipping and packaging as part of “cost of sales” because it is directly tied to fulfilling customer orders. Others keep it as a separate operating expense. Both approaches can work; what matters is that your records clearly show how you’ve treated it and that you’re not mixing personal shipping in with business shipping.

If you sell through marketplaces that provide shipping labels, you may see postage charges deducted from your payouts. In that case, ensure your bookkeeping captures the gross income and the shipping costs correctly. Some sellers inadvertently only record the net payout and forget to recognise shipping fees as expenses (or fail to distinguish fees from postage). A regular reconciliation process can prevent this.

Packaging that doubles as branding or marketing

Packaging isn’t always just protective; it can also be part of your customer experience and brand identity. Branded boxes, custom tissue paper, stickers, inserts, and thank-you cards may have a marketing element. In most situations, these are still business costs if they are used to package and send customer orders or business materials.

Where it becomes more nuanced is if you produce marketing packs that are not tied to an order—like sending sample boxes or promotional bundles to influencers or prospective clients. Those costs can still be business expenses if they are for marketing and promotion, but you should record them in a way that reflects their purpose. Some businesses keep a separate category for “Promotional packaging and samples” to distinguish it from standard dispatch packaging.

If you’re ever unsure, ask yourself: is this spending done to generate or support business income? Can you show the connection to your trade? If yes, it usually fits within allowable business expenditure, provided it is not personal.

Postage for documents: contracts, proposals, and legal correspondence

Not all postage relates to physical goods. Many businesses incur postage costs for sending documents—signed contracts, tender submissions, compliance paperwork, certificates, or legal correspondence. These expenses are typically allowable if the purpose is business-related.

Because document postage can sometimes be sporadic, it’s worth keeping the associated documentation together. For example, if you send a contract to a client by tracked mail, retain the tracking confirmation alongside the contract file. This makes it easy to show that the postage was incurred to carry out your business activities.

International shipping and customs-related costs

International shipping can involve additional charges beyond basic postage: customs forms, duties, handling fees, and special services. Whether you can claim these depends on who is legally responsible for them and why they were incurred.

If your business pays international courier charges to send goods to a customer, those shipping fees are typically business expenses. If you pay additional fees to resolve an issue (like a re-delivery charge, address correction fee, or return shipping due to a customer refusing delivery), those may also be business costs if they arise from your trading activity, but you should record them carefully and keep documentation.

Be cautious with customs duties or import taxes. In some cases, these may be part of the cost of goods purchased for resale (especially if you import stock). In other situations, they might relate to something else entirely. The treatment can vary depending on the nature of the transaction and local tax rules, so good paperwork is important.

Are capital items in packaging ever treated differently?

Most postage and packaging items are consumables: you buy them, use them, and they’re gone. These are typically treated as ordinary revenue expenses. However, you might occasionally buy equipment that supports packaging rather than packaging itself—like a label printer, scales, or a heavy-duty tape dispenser. Those items can last longer and may be treated differently depending on their cost and the accounting rules you follow.

The label printer isn’t “packaging” in the strict consumable sense; it’s equipment. The postage labels it prints are consumables. Keeping these separate in your bookkeeping can help, especially if your accounting method distinguishes between day-to-day expenses and longer-term assets.

Home-based businesses: can you claim postage if you work from home?

Working from home doesn’t change whether postage and packaging is allowable. If you run your business from home and you ship items or mail documents as part of the business, those costs can still be claimable. What matters is that the spending is for business.

What can be trickier for home-based businesses is mixed use. It’s common to have a household supply of envelopes, tape, and stamps, and use them for both business and personal purposes. If you do, you’ll need to either keep business supplies separate or make a fair apportionment.

Another practical point: if you drop parcels off while doing personal errands, you can’t automatically claim your entire trip as a business travel expense. The postage itself is still a business expense, but travel costs depend on the purpose of the journey. Keeping these categories separate avoids confusion.

Common mistakes that cause problems

Most postage and packaging claims are straightforward, but the same issues crop up repeatedly. Avoiding these common mistakes can save you time and reduce risk:

Claiming personal mail as business: Even occasional personal use can undermine a claim if you cannot separate it. Keep supplies separate when possible.

No supporting evidence: Bank statements alone can be vague. Keep receipts, invoices, and shipping confirmations.

Double-counting shipping fees: If your marketplace deducts shipping labels from payouts, you may accidentally record the expense twice if you also enter it manually.

Ignoring packaging materials: Some businesses only claim courier fees and forget about boxes, tape, labels, and protective materials. Over a year, those can be significant.

Inconsistent categorisation: Switching between “cost of sales” and “overheads” month to month can make your accounts harder to understand. Pick an approach and stick with it.

Not separating refunds and returns: If customers return items and you pay for return postage, track it clearly. It helps you understand your true fulfilment costs and customer service costs.

Practical ways to organise and record postage and packaging

You don’t need complicated systems to record these expenses well. A few simple habits go a long way:

Create a dedicated expense category such as “Postage, shipping and packaging.” If you have higher volume, consider splitting into “Postage and courier” and “Packaging supplies” for better insight.

Store digital proofs by saving shipping label PDFs, courier invoices, and supplier receipts in monthly folders.

Match expenses to sales where feasible. For product businesses, reconciling shipping spend against order volume can reveal issues like undercharging for shipping or unexpected courier price changes.

Use a consistent method for bulk purchases like boxes or stamps. If you buy a large quantity that lasts for months, record the purchase when you buy it (common for cash-basis accounting) and keep evidence of business use.

Reconcile monthly so you catch missing receipts, duplicate entries, or miscategorised transactions while they’re fresh.

What about VAT and postage: do you reclaim VAT on shipping and packaging?

VAT treatment can be more nuanced than the general “can I claim it?” question, because not all postage services attract VAT in the same way, and what you can reclaim depends on what the supplier charges and what evidence you have. Packaging materials bought from suppliers typically include VAT (if the supplier is VAT-registered), and you may be able to reclaim it if your business is VAT-registered and the purchase is for business purposes.

Postage purchased from national postal operators can be treated differently from courier services, and some postal services may be exempt or zero-rated, depending on the jurisdiction and the service. Couriers often charge VAT. The practical takeaway is: keep VAT invoices where available, and treat each supplier according to what the invoice shows rather than assuming VAT is always present or absent.

If you are VAT-registered and you charge customers for delivery, you also need to consider the VAT treatment of what you charge. The correct approach depends on how you supply goods and services and how delivery is presented and priced. If VAT is relevant to your business, it’s worth setting up your invoicing and bookkeeping so that delivery charges are treated correctly from the start.

Can you claim postage for sending gifts to clients?

Businesses sometimes send gifts—holiday hampers, thank-you packages, or promotional items. The postage for sending a gift can be a business expense if the gift itself is for business purposes (such as maintaining client relationships or marketing). However, gifts can have specific rules and restrictions depending on local tax law, the value of the gift, and whether it is considered entertaining or promotional.

From a practical standpoint, you should keep clear notes on why the gift was sent and to whom, and keep the receipts for both the gift and the postage. If the gift is clearly personal or unrelated to business, the associated postage would not be allowable as a business expense.

Postage and packaging for freelancers and service businesses

If you’re a freelancer or service provider, you might not ship products, but you may still incur postage costs for sending documents, samples, or equipment. For example, a photographer might ship prints, a designer might mail a prototype, and a consultant might post signed agreements to clients. These costs are typically allowable when they are incurred to deliver your service or meet a contractual requirement.

Service businesses sometimes overlook packaging costs because they feel “small”—an envelope here, a bit of bubble wrap there. If you regularly mail items, it’s worth tracking these purchases. Even modest amounts can become meaningful over a year, and being consistent makes your accounts more accurate.

When postage and packaging might not be claimable

While business-related postage and packaging is usually claimable, there are circumstances where it might not be:

Personal shipments: if you send personal items and try to run it through the business, the cost is not allowable.

Insufficient business purpose: if you cannot demonstrate that the shipment relates to the business, the expense may be challenged.

Mixed use without apportionment: if you buy supplies and use them for both personal and business purposes but claim 100% without justification, that can be problematic.

Non-business activities: if you are shipping items for a hobby or side activity that is not part of your business trade, the costs may not be allowable as business expenses.

In practice, most problems come down to unclear boundaries and weak records. Tightening those up is usually enough to keep your claims on solid ground.

A simple checklist to decide if you can claim it

When you’re looking at a postage or packaging cost and wondering whether it’s claimable, run through this quick checklist:

1) Is it for business? Would you have incurred this cost if you were not running your business?

2) Can you explain the purpose? What was sent, to whom, and why?

3) Do you have evidence? A receipt, invoice, shipping label, tracking number, or order record that supports the transaction.

4) Is there any personal element? If yes, can you separate or fairly apportion the cost?

5) Are you consistent? Are you recording similar costs the same way each time?

If you can answer these confidently, you’re usually in a strong position to claim the expense.

Conclusion: claim what you’re entitled to, and make it easy to prove

Yes—you can generally claim expenses for business-related postage and packaging, and for many businesses it’s an essential, routine category. The most important things are that the costs are genuinely incurred for business purposes, that you keep evidence showing what the costs relate to, and that you avoid claiming personal postage as business spending. With a simple system—separate supplies where possible, keep receipts and shipping confirmations, and record costs consistently—you can claim what you’re entitled to with confidence.

If your situation is more complex—high-volume international shipping, a mix of personal and business use that’s hard to separate, VAT complications, or unusual fulfilment arrangements—consider getting tailored advice from a qualified accountant or tax adviser. But for the majority of small businesses, the rules are straightforward: business postage and packaging is usually allowable, and good records turn it from a messy afterthought into a clean, defensible claim.