Print-on-Demand Businesses — Tax and Accounting Guide

Print-on-demand has made it remarkably easy to sell custom-designed products — t-shirts, mugs, phone cases, posters, tote bags — without investing in stock or managing fulfilment. You create the designs, upload them to a platform like Printful, Printify, or Redbubble, and when a customer orders, the product is printed and shipped on your behalf.

It is a brilliant low-risk business model. But like every business, it comes with tax obligations. This guide explains how UK tax applies to print-on-demand sellers, what expenses you can claim, and how to keep your books in order.

Is print-on-demand income taxable?

Yes. If you are selling print-on-demand products with the intention of making a profit, you are trading — and trading income is taxable.

You have a £1,000 trading allowance. If your total gross income from all trading activities stays below this threshold in a tax year, you do not need to register as self-employed or report it. But the key word is "gross" — that is your total sales revenue before any expenses. Most active POD sellers will exceed this quickly.

Once you cross the £1,000 threshold, you need to register as self-employed with HMRC and start filing Self Assessment tax returns.

There is an important distinction here between platforms. On some platforms (like Redbubble and Teepublic), you receive a royalty on each sale — the platform handles pricing, production, and shipping, and pays you a margin. On others (like Printful integrated with Shopify), you are the seller — you set the retail price, the customer pays you, and you pay the production cost to the print provider.

In both cases, the income is taxable. The difference is in how you account for it. With royalty-based platforms, your income is the royalty payment. With direct-sale models, your income is the full retail price, and the production cost is an expense.

How much tax will you pay?

Your POD profits are subject to income tax at the standard self-employment rates. For the 2025/26 tax year:

• The first £12,570 is covered by your personal allowance (assuming it is not already used by employment income)
• 20% on profits between £12,570 and £50,270
• 40% on profits between £50,270 and £125,140
• 45% on profits above £125,140

You will also pay Class 2 and Class 4 National Insurance on your self-employed profits.

If you have a day job, your personal allowance is almost certainly already spoken for. That means your POD profits are taxed from the first pound at whatever rate band your total income falls into. Our side hustle tax guide covers how this works in practice.

Expenses you can claim

Even though you do not hold stock or manage shipping, POD businesses still have plenty of deductible expenses:

Production costs. The amount your print provider charges per item (base cost, printing, and shipping to the customer). This is typically your largest expense.

Platform and marketplace fees. Monthly subscriptions for Shopify, Etsy listing fees, or any other selling platform charges.

Design tools and software. Adobe Illustrator, Procreate, Canva Pro, Affinity Designer, or any other software you use to create your designs.

Stock assets. Fonts, illustrations, mockup templates, or stock images you purchase for your designs.

Equipment. A drawing tablet, computer, or monitor used for design work. If you also use the equipment for personal purposes, claim only the business proportion.

Marketing and advertising. Social media ads, Pinterest promotion, Google Shopping campaigns, and any other paid marketing.

Website costs. Domain name registration, hosting, SSL certificates, and theme purchases.

Payment processing fees. Stripe, PayPal, or other transaction charges.

Home office costs. A proportion of rent, utilities, and broadband if you work from home.

Training. Courses on graphic design, marketing, or e-commerce that directly relate to your POD business.

Keeping track of these expenses is crucial because POD margins can be slim. If you are selling a t-shirt for £22 and the production cost is £14, your gross margin is only £8 — and once you factor in platform fees, advertising, and transaction costs, the net profit per sale can be surprisingly small. Accurate bookkeeping helps you understand which products are actually profitable and which are just generating activity.

VAT considerations for POD sellers

VAT for print-on-demand sellers depends on your business model and where your products are sold.

If you sell through a royalty-based platform (Redbubble, Teepublic): The platform is the seller and handles VAT. You receive a royalty, which is not subject to VAT unless you are VAT-registered and providing a service to the platform. For most small sellers, VAT does not apply to royalty income.

If you are the merchant (Shopify + Printful/Printify): You are making the sale, so standard VAT rules apply. If your UK taxable turnover exceeds the VAT registration threshold of £90,000, you must register for VAT and charge 20% on sales to UK customers.

International sales: If your print provider ships from overseas (many Printful and Printify orders are fulfilled from the US or EU), the VAT and customs rules for imports apply. For goods shipped to UK customers from abroad valued at £135 or less, you as the online seller are responsible for collecting UK VAT at the point of sale. This is the case regardless of your overall turnover.

EU sales: If you sell to EU customers and the goods are shipped from within the EU (some POD providers have EU fulfilment centres), the sale may be treated as a domestic EU sale. This can trigger EU VAT registration obligations.

The VAT position for POD sellers is genuinely complicated because the fulfilment location varies by product and by order. If you are selling internationally in any volume, it is worth getting specialist advice.

Record-keeping for POD businesses

Good record-keeping is not optional — HMRC requires you to maintain records for at least five years after the filing deadline. For POD businesses, this means keeping:

• Sales records — every order, including the date, amount, product, and customer location
• Production invoices — statements from your print provider showing what you paid per order
• Platform statements — monthly or weekly payout summaries from Shopify, Etsy, or marketplace platforms
• Bank statements — showing payouts received and expenses paid
• Expense receipts — for software subscriptions, advertising, equipment, and other costs

Most POD platforms provide downloadable reports that you can use to reconcile against your bank transactions. Accounted can automate much of this — connect your bank account, and Penny will categorise incoming payments and outgoing expenses as they happen.

Intellectual property — a brief note

While this is primarily a tax and accounting guide, it is worth mentioning that intellectual property is a real risk in the POD space. Make sure your designs are original or that you have the proper licence to use any elements within them. Selling designs that infringe on trademarks or copyrights can result in takedown notices, account suspensions, and legal action — none of which are deductible expenses.

If you do commission designs from freelancers, make sure your contract clearly assigns the intellectual property rights to you.

Scaling your POD business

As your POD business grows, your tax obligations become more complex. Here are a few things to think about as you scale:

• Payments on account. Once your tax bill exceeds £1,000, HMRC requires advance payments towards the following year's liability. Budget for this.
• VAT registration. Monitor your turnover and be ready to register when you approach the threshold.
• Incorporation. At higher profit levels, operating through a limited company can be more tax-efficient. The crossover point varies, but it is generally somewhere around £40,000–£50,000 profit.
• Accounting method. If you start on the cash basis, consider whether accrual accounting would give you a better picture of your business as it grows.

The earlier you set up proper accounting systems, the smoother the transition will be as your business scales. Getting your bookkeeping right when you are doing 10 orders a week is much easier than trying to untangle 500 orders a week retrospectively.

Related reading:

• Tax guide for Etsy sellers
• Selling on Amazon as a side hustle — tax guide
• How much can you earn before telling HMRC?

Accounted helps UK sole traders stay on top of their bookkeeping and tax. Start your free 30-day trial at getaccounted.co.uk.

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• Online Course Creators — How to Handle Tax
• Matched Betting — Is It Tax-Free?

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