Platform · Substack
Substack is a US-incorporated subscription platform paying UK writers in USD via Stripe. The mechanics are simple. A reader subscribes to your paid newsletter through Substack. Stripe processes the payment. Substack takes 10%. Stripe takes around 2.9% plus 20p per transaction. You receive what is left, paid out monthly to your linked bank or Stripe account.
For HMRC the gross subscription amount is your turnover. The Substack platform cut and the Stripe processor fee are both cost of sale. We file the W-8BEN treaty form so US withholding drops to 0% under the UK-US double taxation treaty, convert USD payouts at HMRC monthly average rates, and reconcile the Stripe dashboard to your bank each month.
Part of our guide to tax by platform for UK creators.
We pull the Substack and Stripe dashboards monthly, reconcile against the bank, and split gross subscription revenue from platform and processor fees. The correct turnover figure goes on your Self Assessment return or limited company accounts.
Substack's 10% platform cut and Stripe's ~2.9% + 20p per transaction processor fee both belong in cost of sale, not netted off turnover. Treating them properly raises your gross turnover figure, which affects VAT registration timing and the Ltd-company breakeven point.
Substack is a US platform. Without the W-8BEN treaty form filed correctly inside your Stripe Tax interview, US tax is withheld on your US-source subscription income. The UK-US double taxation treaty drops the rate to 0% when the W-8BEN is filed correctly. We check the setup and claim a foreign tax credit for any residual withholding.
Substack and Stripe pay UK writers in USD. We convert each month's income to GBP at the published HMRC monthly average rate (not the bank conversion rate) and reconcile to the GBP your bank received. The FX difference is recorded so turnover is neither inflated nor understated.
Substack subscription income counts toward the £90,000 rolling-12-month VAT threshold the same as any other UK trader. Once you cross it, you must register within 30 days. We handle the registration, the standard or flat-rate scheme decision, and quarterly returns under Making Tax Digital.
Worked examples
The scenarios below are anonymised composites that mirror the work we carry out for real clients. Figures are illustrative ranges, not specific named accounts.
Substack writer with around 1,800 paid subscribers, predominantly US-based, generating roughly £35k a year. W-8BEN never filed in the Stripe Tax interview, so US withholding was being taken on US-source income.
W-8BEN filed correctly through the Stripe Tax interview. US withholding dropped to 0% under the UK-US treaty. Foreign tax credit claimed on Self Assessment for prior-year withholding. Annual saving in the £2-4k range at that subscriber level.
Substack writer reporting only the post-fee bank deposit as turnover. Substack's 10% cut and Stripe's ~2.9% + 20p per transaction processor fee were never separated.
Gross subscription revenue recorded as turnover, with the Substack and Stripe fees treated as cost of sale. True turnover figure pushed the VAT-registration timing into the next 12 months rather than the year after, which mattered when one big launch month was on the horizon.
FAQ
Self-employment income, VAT once you cross £90,000, discreet engagement letter.
USD payouts converted at HMRC monthly average rates. Same discretion terms as OnlyFans.
Seller Centre reconciled to your bank, marketplace VAT, COGS, inventory and refunds.
AdSense in USD, the W-8BEN that drops US withholding to 0%, sponsorships and gifted goods.
Subs, Bits, donations, the W-8BEN for US-paid revenue, MCN deals.
Tier subscription income, Stripe and Patreon fees as cost of sale, treaty relief.
You get a fixed written quote for the work, with the scope and the fee set out before we touch HMRC on your behalf. No obligation.
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