SA103 box 16 — cost of goods bought for resale or goods used

Stock & Materials

The cost of goods you buy to sell on, or materials used in the service you provide. For tradespeople, this is typically the largest expense category.

What you CAN claim

  • Raw materials used to make products you sell
  • Stock bought for resale
  • Packaging for your products
  • Materials used in providing your service (e.g. paint for decorators, wood for joiners)
  • Wastage that is normal for your trade

What you CANNOT claim

  • Personal use of materials
  • Goods bought but not yet sold (these are stock — deducted when sold)
  • Capital equipment (claim via Annual Investment Allowance)

Common examples for sole traders

Timber bought by a joiner for a jobPaint purchased by a decoratorWholesale stock for an online shopPackaging materials for a product businessRaw ingredients for a food producerPlumbing parts used on a job

Practical tips

  1. 1

    You can only deduct the cost of goods actually sold in the tax year — not goods still in stock at year end

  2. 2

    Keep supplier invoices for at least 7 years

  3. 3

    If you take goods for personal use, you must account for this at market value

View HMRC guidance on GOV.UK

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