.svg)
Nothing ruins the "I just went viral" high quite like the sudden realisation that HMRC wants a cut.
If you are generating revenue through TikTok Shop, Amazon Associates, or generic affiliate links, you are running a business. And like any business, you are taxed on your profit, not your turnover. But here is the problem: most creators see the money hitting their bank account and assume that’s their bottom line. It isn’t.
Without a strategy, you will overpay tax. As a specialist TikTok affiliate accountant in the UK, I see this constantly. Creators leave thousands on the table simply because they don’t know what constitutes a valid business expense.
Whether you need a Shopify accountant for your dropshipping side-hustle or an Amazon accountant to untangle your FBA fees, the principle remains the same: if it’s wholly and exclusively for your business, it’s likely deductible.
Here is the breakdown of the expenses you are probably forgetting to claim.
Your dashboard says you made £10,000 this month. Your bank account says you received £8,500. Which number do you tell HMRC?
Technically, you need to report the gross amount (the £10k) and then deduct the expenses to reach your taxable profit. If you just report the net amount hitting your bank, you are muddying the waters and potentially missing out on accurate financial data that helps you borrow money or get a mortgage later.
The Reality Check: Unlike traditional ecommerce where Xero talks nicely to Shopify, the integration software for creators and affiliates basically doesn't exist yet. There is no magic button that pulls your TikTok commission data perfectly into accounting software. It requires manual reconciliation. If you don't track the expenses listed below, you are effectively paying tax on money you spent to do your job.
You cannot run a digital business without digital tools. These are the easiest wins for content creator tax deductions because they are almost always 100% business use.
If you pay for it to keep your channel or store running, it’s an allowable expense.
Common Deductibles:
Important: Can I write off Spotify? Generally, no. Unless you can prove you use a specific music licensing subscription (like Epidemic Sound) solely for content creation, standard streaming services are considered personal use.
When you buy a laptop, it’s a capital asset. In the UK, we use the Annual Investment Allowance (AIA) to deduct the full cost of these items from your profits in the year you buy them.
However, many creators stop at the laptop and camera. You need to look at the entire ecosystem required to produce high-quality content.
Don't overlook:
This is where things get messy. Most TikTok accountants will tell you to be careful here. You cannot simply deduct your entire rent because you filmed a "Get Ready With Me" in your bedroom.
The Two Methods:
Which is better? If you rent a small flat and have a dedicated studio room you use 8 hours a day, the Actual Costs method usually saves you more tax. If you work from the sofa, stick to the Simplified method.
This is the number one area where affiliate marketing taxes go wrong.
When platforms pay you, they often strip out their fees first.
You must record the income as £100 and the expense as £5. If you only record the £95 income, you are under-reporting your turnover (which matters for VAT thresholds) and failing to capture your true cost of sales.
What to look for:
The tax rules here are specific. You can deduct training that updates or reinforces your existing skills. You generally cannot deduct training that teaches you a brand-new profession or gives you a new qualification.
Allowable:
Not Allowable:
As you scale, you stop doing everything yourself. The costs of hiring help are fully deductible expenses.
Note for UK Sellers: If you hire freelancers based outside the UK, there are no PAYE implications, but you must keep invoices to prove the expense is legitimate business support.
This is high-risk, high-reward territory. The "Wholly and Exclusively" rule is strict.
Props: If you buy a product specifically to review it, and it is not something you use personally, it is a cost of sale. If you buy a designer handbag, review it once, and then use it for three years personally, HMRC will argue that the business purpose was incidental to the personal benefit.
Travel: Travel to a brand meeting, an industry conference (like VidCon), or a location shoot is deductible. This includes train tickets, flights, and hotels.
Clothing: You cannot deduct clothing unless it is a uniform or a costume. Buying a suit for a business meeting is not deductible (because it provides warmth and decency, which is a personal benefit).
The "shoe box of receipts" is dead. But as I mentioned earlier, the software integration for creators isn't quite there yet.
What you need to do:
Being a creator is a legitimate business. You deserve the same tax advantages as any other limited company or sole trader. Don't let the fear of a tax bill stop you from growing, but don't let a lack of knowledge eat into your profits.
If your current accountant thinks "TikTok" is just a clock sound, it might be time to switch.
.png)
.png)
.png)
COPYRIGHT © 2025 SOCIAL COMMERCE ACCOUNTANTS | SOCIAL COMMERCE ACCOUNTANTS LIMITED IS REGISTERED IN ENGLAND UNDER 13802919. REGISTERED ADDRESS: UNIT D2 OFFICE 2, STATION ROAD, SAWBRIDGEWORTH, ENGLAND, CM21 9JX. VAT REGISTRATION NO: GB 400 3244 64
