Personal Income Tax
- The income made from OnlyFans is subject to income tax and national insurance, if you are not working through a limited company, and therefore you must be filing personal tax returns (PTR) with HMRC for the profit they make from the site.
- HMRC have stated they will be targeting OnlyFans and other websites from 2021 onwards – HMRC will be far more lenient on you if you inform them of the situation rather than them catching you out later. It will be easy for them to see when you opened your OnlyFans account.
What do I need to file and when?
- The personal tax year runs from 6th April one year and ends 5th April the following year, with the deadline for filing and payment of tax being 31st January the year after. So recent years are as follows:
- 2020/21: 6th April 2020 to 5th April 2021, due for filing and payment by 31st January 2022
- 2021/22: 6th April 2021 to 5th April 2022, due for filing and payment by 31st January 2023
- You will need to file a personal tax return for each and every year that you made income from a content site. You can deduct any allowable expenses from your content income to come up with a content profit and you will be subject to tax on that figure.
How much tax will I need to pay?
- The amount of tax you will need to pay on your content profit depends on what other earnings you already have. Your OnlyFans earnings will be added to your other income – wages, dividends, interest, rental, etc – to come up with total earnings figure which may be subject to tax at 20%, 40% or 45%. If you are in the higher rate tax bracket, that is the time to start trading as a Limited Company.
What should I do if I need to file?
- You need to notify HMRC immediately that you need to file a personal tax return, starting in whatever tax year you opened your OnlyFans content account. They will issue you with a Unique Tax Reference (UTR) number which you need in order to file your returns. The sooner you notify them you need to file, the more lenient they will be with you on penalties should you have missed any deadlines.
What happens if I don’t file?
- There are penalties for not filing and interest can be charged on any unpaid tax. Every late filed return gets an automatic penalty of £100, then if it goes over three months overdue, a charge of £10 per day is applied until it’s filed.
- If you go over six months late then another £300 or 5% of the tax owing – whichever is higher – is applied and if it becomes 12 months overdue then the same is applied again.
- What can I do?
- Contact us on 0207 100 6011 or [email protected] – tax planning is an art and we will do our upmost to reduce your tax bill where possible, also our fees are tax deductible and will reduce your tax bill.
- Can I reduce the tax?
- Once your earnings are around £40k or above then you may be able to make tax savings and carry out better remuneration planning by forming a limited company to process your income.
- VAT Update
- As of 1 July 2020, OnlyFans announced it would be collecting VAT on behalf on its content creators, and paying any VAT due directly to HMRC.
- However, if your gross income from OnlyFans is over £85k (i.e. the amount BEFORE they deduct their fees) you will need to register for and pay VAT to HMRC.