How to post affiliate links & discount codes on Instagram
Here’s how to post affiliate links and discount codes on Instagram.
Do affiliates have to pay tax on affiliate commission?
This guide covers the key tax requirements for affiliate marketers in the United Kingdom. While tax rules can be complex and vary by location, we’ve broken down the essential information you need to know if you’re looking to earn commission as an affiliate in the UK.
Please be aware:
This guide provides general information about tax obligations for affiliate marketers and should not be considered professional tax or legal advice. Tax laws vary by jurisdiction and change frequently. We strongly recommend consulting with a qualified tax professional or accountant who is familiar with your specific circumstances and local tax regulations.
Remember: affiliate income is taxable income. Even if you’re doing this part-time alongside a job, you are still legally required to declare your earnings.
In this guide, we'll cover the below topics:
Tax rules on affiliate commission in the United Kingdom
HMRC treats affiliate earnings as trading or self-employment income. If your total affiliate income in a tax year (6 April to 5 April) exceeds £1,000, you must register as self-employed and submit a Self Assessment tax return.
This applies even if:
- You do affiliate marketing part-time alongside a regular job
- The income comes from overseas platforms (Amazon, US-based networks, etc.)
- You haven’t been sent any tax forms
The £1,000 Trading Allowance
If you earn £1,000 or less from affiliate marketing in a tax year, this is covered by the Trading Allowance and is tax-free. You don’t need to register for Self Assessment or declare it.
However, once you exceed £1,000, you must register and declare all your affiliate income.
What taxes do I need to pay?
If you decide to register as self-employed for affiliate earnings only, then you’ll need to pay:
- Income Tax: 20% to 45% depending on your total income
- National Insurance: 6% on profits £12,570.00 to £50,270.00 then 2% above
We recommend consulting a tax advisor if you are going to start taking affiliate marketing seriously and driving over £1000.00 in commission earnings.
Registering as self-employed alongside your full-time role makes things a little more complicated – but if it’s weighing up tax evasion + potentially getting fined vs just doing a few hours of tax reporting, then we know what we’d choose…
Registering as self-employed alongside your full-time role makes things a little more complicated – but if it’s weighing up tax evasion + potentially getting fined vs just doing a few hours of tax reporting, then we know what we’d choose…
Can I get paid affiliate commission alongside my full-time job?
Yes – there’s nothing stopping you earning affiliate commission while employed full-time and most affiliates do exactly that. You just need to understand two things: what your employer is entitled to know and how HMRC treats the extra income.
Your employer
There’s no law requiring you to tell your employer about affiliate earnings. However, check your employment contract for:
- Outside work or “second job” clauses – some contracts require you to declare or get approval for any other paid work
- Conflict of interest clauses – if you work for a sports brand or retailer and you’re promoting a competitor, that can be a genuine problem
- Use of company time or equipment – filming content on your work laptop during office hours is asking for trouble
If none of those apply, it’s your business. Avelon does not contact employers and never will.
HMRC
You’ll be employed and self-employed at the same time. That’s completely normal and HMRC has a system for it:
- Your salary continues to be taxed through PAYE as usual
- Your affiliate income is treated as self-employment income, sitting on top of your salary
- If your affiliate income is over £1,000 in a tax year, you register for Self Assessment (by 5 October after the end of the tax year you first went over) and submit a return once a year
Because your Personal Allowance is already used up by your salary, your affiliate profit is taxed at your marginal rate from the first pound – so 20% if you’re a basic-rate taxpayer, 40% if your combined income tips over £50,270. Class 4 National Insurance only applies once your self-employed profit exceeds £12,570, so a modest side income usually attracts no extra NI.
Two practical tips
- Claim your expenses. Camera kit, editing software, website hosting and a share of your phone bill are legitimate costs reduce your taxable profit
- Ask HMRC to collect through your tax code. If your bill is under £3,000 and you file by 30 December, HMRC can take it from your salary over the following year instead of one lump sum
Can I just get paid in gift cards and products?
No – this is a common misconception that can get affiliates into serious trouble with HMRC. HMRC treats gift cards, vouchers and free products as taxable income at their cash equivalent value.
- A £100 gift card = £100 taxable income (£20.00 of tax due)
- Free products must be declared at their market value
- These count towards your £1,000 threshold
Trying to avoid tax by receiving non-cash payments instead of money is tax evasion and can result in penalties. Keep records of all non-cash benefits you receive.
Can't I just get paid through Paypal?
No – you cannot just be paid through Paypal as this is tax evasion. It’s literally the same as setting up an offshore account and transferring your funds to the Cayman Islands.
Do I need to register for VAT?
VAT is totally separate to Income Tax and National Insurance. You only need to register to be VAT registered if your income exceeds £90,000.00 per year.
When you register for VAT, you need to add your VAT number to your affiliate network of choice. Your commission payments will then have VAT added on top of them. This is not extra income. VAT money must be paid directly to the HMRC when you submit your VAT return.
Does Avelon manage my taxes for me?
No – Avelon does not manage your taxes, work with the HMRC payroll or any tax advisors on your behalf. Avelon is an affiliate platform and not an employer. All tax is under your control and you must report any earnings you have accrued from Avelon to the HMRC in a timely manor.
However, Avelon does provide helpful tools for affiliates to declare revenue such as VAT integration into the HMRC portal and downloadable receipts.
Posts related to this article
Explore other posts related to this article below, or head back to Affiliate Support.
Completing your affiliate profile
How to complete your affiliate profile when you join Avelon. We recommend adding all your social media URLs, a bio and a profile photo to your profile.
Applying to affiliate programs
Applying to affiliate programs couldn’t be simpler when you join Avelon. In this guide, we’ll walk you through all the steps required.