Tax for TikTok Shop Sellers
TikTok Shop blends two income streams: products you sell and commission you earn promoting others. They're taxed differently, and viral growth can push you past the VAT threshold faster than almost any other platform.
- VAT threshold
- £90,000
- VAT rates
- 20% · 5% · 0%
- Trading allowance
- £1,000
Seller income vs creator commission
Selling your own products is trading income; affiliate or creator commission for promoting other people’s products is also taxable, but accounted for separately as service income.
Keep product sales and affiliate commission in distinct records — they behave differently for VAT and expenses.
Viral growth and the VAT threshold
VAT registration is triggered at £90,000 of taxable turnover on a rolling 12-month basis. A single product going viral on TikTok can cross that line in weeks, so monitor it continuously.
VAT rates on what you sell
Once registered, charge VAT at the rate for your goods: standard 20% on most products, reduced 5% on some items, or zero 0% where it applies, such as certain children’s clothing.
- Standard 20% — most products
- Reduced 5% — qualifying goods
- Zero 0% — books, children's clothing, most food
The £1,000 trading allowance
Small or occasional commission and sales can fall within the £1,000 trading allowance, but once your combined sales income exceeds £1,000 you must register for Self Assessment.
Platform reporting
TikTok reports seller and creator income to HMRC under the digital platform rules. This adds no new tax but means your TikTok Shop earnings are visible to HMRC.
Content and product income can both appear in HMRC’s data, so report all of it consistently.
Sole trader or limited company
Rapid scaling may make a limited company worthwhile, with Corporation Tax from 19% to 25% on profits, versus simpler sole-trader Self Assessment while you're smaller.
Common questions
Is my affiliate commission taxed the same as product sales?
Both are taxable, but they are different income types. Product sales are trading income; affiliate or creator commission is service income. Keep them recorded separately.
How quickly could I need to register for VAT?
As soon as your rolling 12-month taxable turnover passes £90,000. On TikTok Shop a viral product can take you there very quickly, so track your turnover often.
Does the £1,000 trading allowance cover my TikTok earnings?
It can cover small amounts, but once your total sales and commission income exceeds £1,000 you must register for Self Assessment and report it.
Get expert eyes on your tax
Book a free 30-minute Tax Health Check — we review your situation, sense-check the figures and show you where you could save.
For guidance only — this factsheet does not constitute professional advice and is not a substitute for advice based on your specific circumstances. Whilst every care has been taken in its preparation, it may contain errors for which we cannot be responsible. Figures are for the 2026/27UK tax year (England, Wales & Northern Ireland) and may change. Last reviewed 6 December 2025.