Substack Income Tax UK 2025/26: A Plain-English Guide
Paid Substack subscriptions are taxable self-employment income in the UK. The rules are the same as for any other content creator, with a few wrinkles unique to Substack: USD payments, Substack's 10% cut, Stripe processing fees, and how to handle subscriber-by-subscriber gross calculations.
How Substack income is taxed
Substack writers earning paid subscriptions are sole traders by default. Income is subject to:
- Income tax at marginal rate (20% / 40% / 45%)
- Class 4 NI: 6% on profit £12,570 to £50,270, 2% above
- £1,000 trading allowance applies if gross is under that threshold
What counts as gross income
Your gross income for tax is what subscribers paid, before Substack's 10% fee and before Stripe's processing fee. Both are allowable expenses if you claim actual expenses.
Example: 200 subscribers paying £5/month = £12,000/year gross. Substack takes ~£1,200 (10%). Stripe takes ~£420 (~3.5%). You receive ~£10,380. For tax, your gross income is £12,000.
Allowable Substack expenses
- Substack's platform fee (10%)
- Stripe processing fees
- Domain costs (if using a custom domain on Substack)
- Software subscriptions (Grammarly, AI tools, image editors)
- Stock images, fonts, design tools
- Research costs (books, subscriptions to other newsletters or research tools)
- Equipment (laptop, microphone for podcast Substacks)
- Marketing and ad spend
- Use of home: HMRC flat rates (£10/£18/£26 monthly)
- Accountant fees
USD to GBP conversion
Substack pays in USD. Convert each payout to GBP using either:
- Spot rate on the day the money was received, or
- HMRC's monthly average rate for that month
Pick one method and apply it consistently across the tax year. Keep a record (a simple spreadsheet works).
VAT considerations
The UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period (2025/26). Substack collects VAT on UK and EU subscriptions on your behalf for some plans, check your Substack settings. Once you're above £85,000, get an accountant on board to navigate registration and the impact on subscriber pricing.
Worked examples
| Situation | Approximate UK tax + NI |
|---|---|
| £900 gross / year | £0 (under trading allowance) |
| £5,000 gross, £600 expenses, basic rate, employed | ~£800 |
| £20,000 gross, £2,500 expenses, no other income | ~£1,000 tax + £290 NI |
| £60,000 gross, £6,000 expenses, no other income, full-time | ~£11,300 tax + £2,000 NI |
FAQs
I get most of my subscribers from outside the UK. Does that change anything?
For income tax: no, if you're UK tax resident, all your worldwide self-employment income is taxable here. For VAT: subscribers' location matters because Substack handles VAT collection differently for UK/EU/RoW subscribers.
I just moved to the UK. Do my pre-arrival Substack earnings count?
Generally only earnings received while you're UK tax resident are subject to UK tax (with some "split year" treatment in your year of arrival). The rules are nuanced; see HMRC's Statutory Residence Test.
Substack just paid me a year-end "bonus" payout, how is that taxed?
The same as any other income from the platform. It's added to gross income for the tax year in which you received it (cash basis) or in which it was earned (accruals basis).