Do OnlyFans Creators Need to Register for VAT

ONLYFANS AND VAT

OnlyFans has gained popularity since it started as an online subscription service in 2016. In 2023, more than 2 million people have registered as creators while 120 million are users. The platform’s subscription model allows creators to earn money as the fans pay to view content. Of course, anyone who exchanges services or products for a price is liable to value-added tax or VAT. 

In the UK, not all OnlyFans creators are required to pay VAT.

OnlyFans creators need to register for VAT if their annual turnover exceeds £85,000. If you are curious whether or not you have to register for VAT, what VAT is and how it works, keep reading to learn more.

table of contents

• OnlyFans 101: How the Payments in the Platform Work
• VAT in the UK
• When Am I Required To Pay VAT as an OnlyFans Creator?
• OnlyFans VAT Management
• For Those Who Aren’t Registered
• For Those Who Are Registered
• FAQs
• Final Thoughts on OnlyFans VAT 
• Sources

The main appeal of OnlyFans is how it offers exclusivity to the fans. The platform may be associated with adult content, but fitness trainers, chefs, artists, and other content creators also use the application to share premium media. This direct connection to fans fosters loyalty and helps creators maintain an audience. 

To access the paywalled content, a fan needs to subscribe to the creator’s channel. The lowest tier is a month’s worth of access while the highest is an annual subscription. As a creator builds a subscriber base, they can gain a substantial amount of money. Some creators even earn so much that OnlyFans become their main income source. Earning a significant amount means that content creators also have to pay income tax while customers have to pay VAT. How does the latter work?

VAT in the UK is a consumption tax. This amount is added to goods and services, meaning the customers are actually paying the tax. VAT is determined mainly by the value of the product minus the cost of materials used to produce it. The higher the price of the goods or service, the higher the VAT. In the UK, VAT has a standard rate of 20%. For example, if a person buys a £12 product, the net value of the item is £10 while £2 is the VAT.

However, consumers are not the entity that pays the VAT to the HMRC (His Majesty’s Revenue and Customs). This task is left to the business. If you are an OnlyFans creator, you are technically the business that offers the product, meaning that it is your responsibility to pay for VAT provided by consumers. Still, not all creators are required to make VAT payments. There are certain thresholds you must reach before you are liable to pay VAT. 

Registering for VAT in the UK depends on a creator’s earnings. You are only required to start paying the amount once your taxable turnover (sales income) exceeds the £85,000 threshold. This is calculated on a rolling twelve monthly basis, and applies whether you are trading as a sole-trader or a limited company. You will also need to register if your anticipated turnover in the next 30 days is above £85,000. Even if you have a full-time job and are only using OnlyFans as a secondary income source, you will still be required to register and pay VAT. 

You are also required to register if you satisfy ALL of these conditions:

• You’re not located in the UK.
• Your company is based outside of the UK.
• You’re currently providing services and goods to the UK or are expecting to do so in the next 30 days.

Those who do not meet the requirements above can still voluntarily register for VAT. While you still need to pay HMRC 20% for every transaction, you will be able to deduct 20% VAT from business-related expenses. These include:

• Cameras and filming gear
• Editing software
• Laptop or computer
• Props
• Transportation and venue rentals
  

The company OnlyFans also earns income from fans subscriptions. That means they also need to pay VAT. In fact, OnlyFans pays HMRC all the VAT it receives to help protect the 80/20 income split it has with creators. They’ve also created ways to help creators pay VAT conveniently.

How their VAT management model works depends on whether the creator is registered for VAT. See below.

Creators who aren’t able to reach the VAT threshold of £85,000 don’t need to take action. In this case, OnlyFans takes care of the VAT payments on your sales, a process that has been around since 2020. For example, let’s say that you want to charge £10 for a month’s subscription. OnlyFans will automatically add £2 to the subscription amount since that’s 20% of £10, making customers pay a total of £12. You will earn £8 while OnlyFans earns £2 based on the 80/20 split. OnlyFans will then pay the remaining £2 to HMRC as VAT. 

Things get a bit more complicated if you are registered for VAT. In summary, OnlyFans will collect the full amount of VAT paid by subscribers, then they will pay you monthly for your portion of VAT and your full income. Then, it will be up to you to pay the VAT to the HMRC.

In the example we outlined above, OnlyFans will pay you your £8 earnings, and the £1.60 of VAT. The £1.60 of VAT is 20% of your £8 earnings, which you will need to pay to HMRC, usually every three months. Of course, the more subscribers you have, the higher the amount you will need to remit. 

OnlyFans requires creators to accomplish a few things before they can begin sending VAT instalments. Here’s what you need to do.

1. Input your VAT number in the OnlyFans banking section and confirm acceptance of self-billing for VAT payments.
2. OnlyFans will need to make security checks before sending VAT back to you. Make sure to send proof of filing your VAT return to vat@onlyfans.com. This step will ensure that HRMC is notified of your VAT from your subscription revenue. 
3. Once the security checks are done, you can begin sending invoices using the “Add Documents” on the VAT documents section under the Statements section of your account.
4. You will then receive two payments from OnlyFans: one for VAT and another for your actual revenue. The former will include a VAT statement, so you can easily pay the correct amount to HMRC. 
   

While being an OnlyFans creator may seem like an easy way to earn extra income, you are still responsible for your own tax obligations.

Make sure that you’re monitoring your earnings and registering for VAT if you are exceeding the mandated threshold, so you can continue enjoying your income and avoid legal trouble. If you don’t quite know how to approach tax payments, you can always consult with a Chartered Accountant.

✅ Read our comprehensive guide on how to make money on OnlyFans.

✅ Read our comprehensive guide on how to make money on OnlyFans.

https://techreport.com/statistics/onlyfans-statistics/

https://www.investopedia.com/terms/v/valueaddedtax.asp

https://www.gov.uk/vat-rates

https://www.gov.uk/register-for-vat

https://onlyfans.com/my/banking/