Last updated: 14 October 2026
Do you pay tax and National Insurance on money earned from a website?
Yes, if it’s more than £1,000 a year. Income from a website, such as advertising, affiliate commission, selling products or digital downloads, is usually trading income. The first £1,000 of gross trading income each year is covered by the trading allowance. Above that, you must register for Self Assessment, and you pay income tax on your profit and Class 4 National Insurance if profits exceed £12,570 in 2026/27.
Is it trading?
| Activity | Usually trading? |
| Selling products or services through your site | Yes |
| Advertising and affiliate income from a blog | Yes, if regular and commercial |
| Selling your own unwanted items occasionally | No |
| Royalties from your own creative work | Usually treated as trading or other income |
Tax and NIC rates for 2026/27
| Profit | Income tax | Class 4 NIC |
| Up to £12,570 | 0% (Personal Allowance) | 0% |
| £12,571 to £50,270 | 20% | 6% |
| £50,271 to £125,140 | 40% | 2% |
| Over £125,140 | 45% | 2% |
Your website profit is added to your other income, such as salary, to decide your tax rate.
The trading allowance
- If gross website income is £1,000 or less, you don’t need to report it
- If it’s more, you can deduct either the £1,000 allowance or your actual expenses, but not both
- If your expenses exceed £1,000, claim the expenses instead
Example
Nadia works full-time on a salary of £35,000 and runs a recipe blog. In 2026/27, she earns £6,000 from advertising and affiliate links, with £1,400 of hosting, software and equipment costs. Her profit is £4,600. It’s taxed at 20% (£920), and as her trading profit is below £12,570, she pays no Class 4 NIC.
Expenses you can claim
- Hosting, domain and software subscriptions
- Website design and development
- A share of broadband and phone costs
- Equipment such as cameras and laptops (through capital allowances)
- Advertising and marketing costs
Platforms report to HMRC
Since January 2024, platforms such as Etsy, eBay and Amazon have had to report sellers’ income to HMRC if they make 30 or more sales or earn about £1,700 or more a year. HMRC uses this data to check returns.
Registering
If you need to file, register for Self Assessment by 5 October after the end of the tax year in which you started earning. File online by 31 January.
VAT
If your website turnover goes over £90,000 in any 12 months, you must register for VAT. Digital services sold to EU consumers may need VAT through the EU One Stop Shop.
Records to keep
Keep monthly statements from ad networks and affiliate programmes, platform sales reports, invoices for expenses and bank statements. Exchange rates for income paid in dollars or euros should be recorded too. Simple bookkeeping software or a spreadsheet is enough for most small sites.
Frequently asked questions
Do I need to tell my employer?
No, but check your employment contract.
What if I make a loss?
Losses can be set against other income in some cases.
Do I pay Class 2 NIC?
No, it’s been abolished for profits above the Small Profits Threshold; you can pay voluntarily below it.
Is affiliate income from abroad taxable?
Yes, if you’re UK resident.
Related: freelance income while employed, registering for National Insurance and digital platform reporting.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with side income and Self Assessment. See our sole trader accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
