You post a shoppable video, someone buys, and a few weeks later TikTok pays you a commission. Brilliant. The question nobody answers clearly is what HMRC expects you to do with that money.
This guide is for UK-based creators earning affiliate commission through TikTok Shop. We will keep it plain. Two taxes can apply: income tax (almost always relevant once you earn a bit) and VAT (usually not, until your turnover gets large, and even then often not in the way you would expect).
We will show you where the lines are, with the current figures for the 2025/26 tax year and a worked example you can copy. Where a rule comes from HMRC, we have linked the exact page in the Sources list at the end.
Is TikTok affiliate commission taxable income?
Yes. If you are promoting products to earn commission on a regular basis with the aim of making money, HMRC treats that as trading, and the profit is taxable.
The mechanics are simple. A seller sets a commission rate on a product, you drive a sale through a shoppable video or your showcase, and TikTok pays you a percentage of that sale. That payment is self-employed trading income, the same as any freelancer's fee.
It does not matter that the money lands in your TikTok balance rather than your bank, or that the amounts are small to start with. What matters is that you are doing it commercially. Casual one-off sums are treated differently, but a creator building an affiliate income is trading.
Do I need to tell HMRC about my TikTok commission?
The answer hinges on a single figure: the £1,000 trading allowance.
This is the bit most creators get wrong, so here it is clearly. Every UK individual can earn up to £1,000 of gross trading income in a tax year without telling HMRC at all. Gross means total commission before any expenses, not profit.
There are three outcomes:
- Gross commission of £1,000 or less in the tax year. You usually do not need to register for Self Assessment or report it. You should still keep a record of what you earned.
- Gross commission over £1,000. You must register for Self Assessment and file a tax return. You then choose, each year, whether to deduct the flat £1,000 trading allowance or your actual business expenses, whichever is better. You cannot do both.
- You want to claim a loss or pay voluntary National Insurance. You may want to register even below £1,000.
If you are also selling physical products yourself, that income is a separate matter from affiliate commission, and our accountants for TikTok creators can help you keep the two cleanly apart.
In short: TikTok affiliate commission is taxable self-employment income. If your gross commission for the year is more than £1,000, you must register for Self Assessment and report it; below that, the trading allowance usually covers you.
When do I register and file?
If you cross the £1,000 trading allowance, you must register for Self Assessment by 5 October following the end of the tax year in which you started. The online tax return and any tax due are then both due by midnight on 31 January following that tax year.
So for income earned in 2025/26 (the year to 5 April 2026), you register by 5 October 2026 and file and pay by 31 January 2027.
How much income tax will I pay on TikTok commission?
Affiliate commission is added to your other taxable income and taxed at your marginal rate. For 2025/26, the personal allowance and bands for England, Wales and Northern Ireland are as follows. Scotland sets its own income tax rates and bands, so the figures below do not apply there.
| Band | Taxable income (2025/26) | Income tax rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
On top of income tax, self-employed profits are subject to Class 4 National Insurance. For 2025/26, Class 4 is charged at 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270.
The key point: if you already have a job or other income that uses up your personal allowance, your TikTok commission can be taxed from the very first pound at 20% or more. There is no second tax-free allowance for a side hustle.
If you want to estimate your bill, our self-employed tax calculator lets you plug in your commission and other income.
When does VAT apply to TikTok affiliate commission?
This is where most guides get it wrong, so read this section twice.
VAT registration is only compulsory once your taxable turnover goes over £90,000 in any rolling 12-month period, or you expect to cross it in the next 30 days. That £90,000 threshold has applied since 1 April 2024.
The twist for affiliate commission is what counts as taxable turnover. Your affiliate commission is a supply of a service (marketing) to TikTok's operating company. For affiliate payouts, that contracting entity is typically established outside the UK.
Under the B2B general rule for services, the place of supply is where the customer belongs. So when your business customer belongs outside the UK, your commission is outside the scope of UK VAT, and HMRC's rules say supplies made outside the UK are disregarded when you work out whether you have crossed the registration threshold.
In plain terms: a UK creator earning affiliate commission from an overseas TikTok entity often does not have to register for VAT even at high earnings, because that commission does not count towards the £90,000 threshold. You should keep evidence that your customer is in business and belongs outside the UK.
Two things change that picture:
- Other UK-source taxable income. If you also earn money that is within the scope of UK VAT (for example, brand deals invoiced to UK companies, or selling your own products in the UK), that income does count towards the £90,000 threshold.
- Voluntary registration. You can register voluntarily even below the threshold. Whether that helps depends on your costs, and it is worth a quick chat before you do it.
If you do register, your overseas affiliate commission is generally an outside-the-scope supply, so you would not add UK VAT to it. The overseas customer accounts for any VAT due in its own country under that country's reverse charge rules, not you.
How do I treat commission from a UK-based platform entity?
If your affiliate commission were instead paid by a UK-established business, the place of supply would be the UK and the commission would be a standard-rated supply once you are VAT-registered, charged at the 20% standard rate.
This is why the contracting entity on your payout matters so much. Check your TikTok Shop agreement and remittance documents to see who is actually paying you, and get advice if it is unclear. We cover this in our work for TikTok creators.
What about the VAT Flat Rate Scheme?
If you do end up VAT-registered, the Flat Rate Scheme (FRS) is worth understanding, because creators have very few costs and that can be a trap.
Under the FRS you pay HMRC a fixed percentage of your VAT-inclusive turnover and generally cannot reclaim VAT on your purchases. You can join if you expect VAT-taxable turnover of £150,000 or less (excluding VAT) in the next year, and you must leave once total business income exceeds £230,000.
The catch for creators is the limited cost business rate. If your spending on goods is either less than 2% of your flat rate turnover, or more than 2% but less than £1,000 a year, you are a limited cost business and must use the 16.5% flat rate. Most creators buy services and digital tools, not goods, so they often fall into this category.
Under the FRS you cannot normally reclaim input VAT, although there is an exception for a single capital asset costing £2,000 or more (including VAT). For a creator whose income is mostly outside-the-scope overseas commission, the FRS rarely makes sense, which is another reason to take advice before registering.
Does TikTok report my earnings to HMRC?
Yes, and this is worth understanding so it does not catch you out.
Since 1 January 2024, digital platforms operating in the UK must collect information about sellers and report it to HMRC. The platform collects details such as your name, address and tax reference, and reports the relevant figures to HMRC by 31 January each year. You should receive a copy of what is reported about you.
A platform reporting your details to HMRC does not automatically mean you owe tax. It is simply data sharing. Whether you owe tax depends on the rules in this guide, not on the report. But it does mean HMRC can see your activity, so quietly leaving commission off your tax return is not an option.
The practical takeaway: keep your own records, report your income correctly, and the platform report becomes a non-event rather than a nasty letter.
Illustrative example: a creator's tax position
Illustrative example. Maya is a UK-based creator with a part-time employed job paying £20,000 a year, which uses up her personal allowance. In 2025/26 she earns £9,000 of gross TikTok affiliate commission from an overseas TikTok entity, with £600 of allowable expenses (editing software, props, a share of her phone bill).
Because her commission is over £1,000, she registers for Self Assessment for 2025/26. She compares the two ways of working out taxable profit:
- Trading allowance: £9,000 commission minus the £1,000 flat allowance = £8,000 taxable profit.
- Actual expenses: £9,000 commission minus £600 expenses = £8,400 taxable profit.
The trading allowance gives the lower figure, so Maya claims it. Her taxable profit is £8,000.
Her employment has already used her personal allowance, and her total income stays within the basic rate band, so the £8,000 is taxed at 20%:
- Income tax: £8,000 x 20% = £1,600.
- Class 4 National Insurance: £8,000 x 6% = £480.
- Total due on her commission: £2,080.
On VAT: Maya's commission comes from an overseas TikTok entity, so it is outside the scope of UK VAT and does not count towards the £90,000 registration threshold. She has no other UK-taxable sales, so she does not need to register for VAT despite a healthy income.
This is illustrative only. Your figures, your other income, and who actually pays your commission all change the answer.
A simple decision walkthrough
Use this to find your likely position, then confirm it with an accountant before you act.
- Is your gross TikTok commission for the tax year more than £1,000? No: usually nothing to report, but keep records. Yes: go to step 2.
- Register for Self Assessment (by 5 October after the tax year) and work out your taxable profit using either the £1,000 trading allowance or your actual expenses, whichever is lower.
- Add that profit to your other income and apply the income tax bands above, plus Class 4 National Insurance on the profit.
- For VAT, identify who pays your commission. Overseas TikTok entity: the commission is outside the scope of UK VAT and is ignored for the £90,000 threshold. UK entity, or you have other UK-taxable income: add those amounts up and check whether you have crossed £90,000 in any rolling 12 months.
- If you are near or over £90,000 of UK-taxable turnover, get advice on registration and whether a scheme like the FRS helps or hurts.
Frequently asked questions
Do I pay tax on TikTok affiliate commission if it is my only income?
If your gross commission is your only income and your taxable profit stays under the £12,570 personal allowance for 2025/26, you will not pay income tax, though you may still need to register for Self Assessment once gross commission exceeds £1,000. Class 4 National Insurance only starts above £12,570 of profit.
Is the £1,000 trading allowance the same as the personal allowance?
No. The £1,000 trading allowance is a separate relief that lets you earn up to £1,000 of gross trading income without reporting it, or deduct £1,000 instead of expenses. The personal allowance (£12,570 for 2025/26) is the amount of total income you can have before any income tax applies. They stack.
Do I charge VAT on TikTok affiliate commission?
Usually not. Most UK creators are below the £90,000 VAT threshold, and commission from an overseas TikTok entity is outside the scope of UK VAT anyway and is left out of the threshold calculation. If you are VAT-registered and the entity paying you is overseas, you do not add UK VAT to that commission.
Does receiving a platform report from TikTok mean I owe tax?
No. Since 1 January 2024, platforms report seller data to HMRC, but a report does not by itself create a tax bill. Whether you owe tax depends on whether you are trading and how much profit you make. The report just means HMRC can see your activity, so report it correctly.
Can I deduct expenses against my commission?
Yes, if you do not claim the £1,000 trading allowance. You can deduct genuine business costs such as editing software, equipment and a fair share of your phone and internet. Each year you pick whichever is better, the flat £1,000 allowance or your actual expenses, but not both.
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Get your TikTok commission tax right
Affiliate income is straightforward to tax correctly and expensive to get wrong. If you want a clear answer on whether you need to register, which entity is paying you, and whether VAT ever applies, talk to a specialist.
Book a free 20-minute call with a Zmartly accountant through our service for TikTok creators, and we will map your exact position before your next deadline.
