TikTok Shop turned creators into retailers at a speed the tax system has absolutely noticed. If you're selling — your own products, or earning affiliate commission showcasing other people's — you're trading, and a few rules kicked in earlier than you might think.
You're probably already past £1,000
The trading allowance disappears fast at retail scale: £1,000 of gross sales is a handful of good livestreams. Past it, you register for Self Assessment — and remember TikTok, like all major platforms, reports seller data to HMRC.
Commission sellers: count it right
Affiliate commission from showcasing products is straightforward trading income. Watch the gross-vs-net trap: your income is the commission TikTok pays you, and any fees clipped before payout are expenses — record both sides, not just the bank deposit.
Product sellers: three things bite early
- Stock accounting. Your taxable profit reflects what you sold, not what you bought — unsold stock at year end isn't yet a cost. Buying £20k of inventory in March doesn't wipe out March profits.
- VAT arrives at retail speed. The £90,000 rolling threshold counts your full selling price. A seller doing £7,500/month of sales is at the line within a year — see the creator VAT guide.
- Samples and gifted stock you receive in return for content follow the barter rules — value them honestly.
The margin truth
Between product cost, shipping, TikTok's commission and refunds, social commerce margins are thinner than the revenue looks. Real bookkeeping — platform statements reconciled against payouts, costs of goods tracked — is the difference between scaling a business and scaling a busy hobby. That's exactly what we set up, with FreeAgent included, from £19 + VAT a month.
