Costs and pricing
Part of TikTok Shop UK sellers: VAT is due on the full sale price
TikTok Shop UK sellers: VAT is due on the full sale price
TikTok Shop UK sellers owe VAT on the full price the buyer pays, not on what is left after commission: a £30 sale worked through, plus the £90,000 threshold.
What to take away
- TikTok Shop charges referral commission of 9% on most completed sales in the UK, with lower rates for a listed set of categories.
- Payouts to UK sellers arrive in pounds sterling, after commission, creator affiliate fees and refunds are deducted.
- VAT is charged on the full price the customer pays, never on the commission alone.
- Registering for VAT is a separate decision from opening a shop, and it changes the maths on every order.
- GOV.UK has held the VAT registration threshold at £90,000 since 1 April 2024, which is the figure to plan against if the shop is growing.
On a £30.00 sale, the per-sale numbers look like this.
At the 9% standard rate
- Customer pays
- £30.00
- Referral commission
- £2.70
- Creator affiliate commission at 10%
- £3.00
- Output VAT at 20% if registered
- £5.00
- Left before product cost, fulfilment and returns
- £19.30
At the 5% illustrative rate
- Customer pays
- £30.00
- Referral commission
- £1.50
- Creator affiliate commission at 10%
- £3.00
- Output VAT at 20% if registered
- £5.00
- Left before product cost, fulfilment and returns
- £20.50
Where each TikTok Shop fee is set
TikTok Shop is the platform's own checkout, so the sale completes inside the app rather than on your website (TikTok Shop, Wikipedia). That single fact decides who charges what: the platform bills you, and your own VAT and fulfilment costs follow the order.
Who charges what
TikTok Shop
- Referral commission
- Charged
- Creator affiliate
- Charged
- Cost of goods
- Not charged
- Parcel and delivery
- Not charged
- Returns
- Not charged
- Output VAT
- Not charged
Your own books
- Referral commission
- Not charged
- Creator affiliate
- Not charged
- Cost of goods
- Charged
- Parcel and delivery
- Charged
- Returns
- Charged
- Output VAT
- Charged
Referral commission lands first, and creator affiliate commission follows if you run an affiliate plan. The cost of goods, the parcel and the returns stay on your own books whatever the platform charges.
Fees are defined in the seller terms you accept, not in a marketing blog. If you are still choosing where to sell, comparing TikTok Shop with other routes shows how eligibility differs between platforms.
Referral commission rates by category
TikTok Shop's UK fee schedule sets the standard referral fee at 9%, and a listed set of categories carries lower rates. Commission is charged on the item price after seller discounts, not on the payout.
| Rate tier | Categories | Referral commission |
|---|---|---|
| Standard | Most categories on the platform | 9% |
| Lower | The categories named in the fee schedule | Set per category |
The £30 sale in one chart
Illustrative figures only, using a 5% referral rate and a 10% creator rate on a VAT-inclusive £30.00 item.
The VAT figure is the part sellers miss. Commission is a cost; VAT is a liability on the whole sale.
VAT, the threshold and the rate
Output VAT is due on the full price the customer pays, not on what remains after fees. GOV.UK sets the registration threshold at £90,000, unchanged since 1 April 2024, and you can read the conditions on Register for VAT.
Standard-rated goods carry 20% VAT, which GOV.UK lists on its VAT rates page. Commission invoices you receive usually carry VAT too, and that part is normally recoverable as input tax if you are registered. Our social commerce VAT rules guide walks through the records that support both sides.
Payouts, refunds and timing in GBP
UK sellers are paid in pounds sterling into a UK bank account, so there is no currency conversion on a domestic sale. Settlement usually waits until the order completes, which can be several days after delivery.
Payout handling is deducted from each settlement before the money reaches your bank. There is no single national figure for it: TikTok Shop sets the amount in the fee schedule, and the payout report shows what was taken from each order and when it was released.
Refunds and returns are deducted from later payouts, and the commission treatment on a refunded order follows the terms in force when it was placed. Keep the fee schedule you agreed to, dated, so you can prove which version applied.
Costs that sit outside commission
| Cost line | How it is charged | Where to check |
|---|---|---|
| Referral commission | Percentage of the item price on a completed sale | Seller terms and fee schedule |
| Creator affiliate commission | Percentage paid to the creator who drove the sale | The affiliate plan you set |
| Payout handling | Deducted per settlement, at the amount set in the fee schedule | Payout report |
| Fulfilment and delivery | Per parcel, plus packaging and labour | Your own cost records |
| Returns and refunds | Refunded value, return postage, unsellable stock | Returns report |
| VAT on the sale | 20% standard rate on the VAT-inclusive price | GOV.UK VAT rates |
| Ads and boosts | Spend per click or per view, invoiced separately | Ads manager |
Common questions
Is commission charged on delivery charges?
Usually not: a separate delivery charge sits outside the commission.
Do I charge VAT on a TikTok Shop sale?
If you are VAT registered and the goods are standard-rated, VAT is due on the full price the customer pays. Commission does not reduce that liability, because it is a separate supply to you.
Are fees refunded when an order comes back?
That depends on the terms in force when the order was placed.
Do I need to register for VAT before I join?
No. Joining the platform and registering for VAT are separate steps, and registration depends on your taxable turnover against the threshold.
