How to Sell Digital Products in the UK: Tax, VAT and Fees

Selling a planner, an ebook or a course from your Instagram or TikTok is one of the simplest side businesses you can start in the UK. There's no stock and no postage, but there are a few tax rules worth knowing before your first sale. This guide covers income tax, VAT, selling to buyers in the EU, and what each type of platform costs, with figures from GOV.UK checked in October 2026.

What sells well

• Templates and planners (Notion, Canva, spreadsheets).
• Ebooks and guides that answer one question your followers keep asking.
• Presets, LUTs and design assets.
• Recorded courses and workshops.
• 1:1 calls and coaching sessions.

Income tax: the £1,000 trading allowance

HMRC gives individuals a £1,000 trading allowance each tax year (6 April to 5 April). It covers all your trading income together, so money from selling goods, providing services and creating online content counts towards the same £1,000. If your total trading income goes over it, you need to tell HMRC, usually by registering for Self Assessment and filing a tax return.

VAT: when you need to register

If you're based in the UK, you must register for VAT when your taxable turnover for the last 12 months goes over £90,000, or when you expect it to go over £90,000 in the next 30 days. Below that, you don't have to charge UK VAT, though you can register voluntarily.

HMRC treats most things sold automatically online as "digital services": ebooks, downloads, music, software and similar. Its own examples draw a fine line: a PDF sent automatically by your store's system counts as a digital service, but a PDF you email to the buyer by hand doesn't. Most creator stores deliver automatically, so assume the digital services rules apply.

Selling to buyers in the EU

For digital services sold to consumers in the EU, VAT is charged where the buyer lives, not where you are. HMRC's guidance says a UK business selling these to EU consumers needs to either register for an EU VAT scheme for non-EU businesses (often called the non-Union scheme) in one EU country, or register for VAT in each country where it sells. The guidance doesn't mention a sales threshold for this. If you expect many EU buyers, ask an accountant how to handle it before you sell, or use a merchant-of-record platform that takes care of it for a higher fee.

Where to sell, and what it costs

Percentage fees are cheaper while you're making a handful of sales a month. Once you sell regularly, a flat plan usually costs less, and the gap grows with every sale.

Setting up on Insidemetics

We build Insidemetics, so we're biased. You can set your store's currency to pounds, so buyers see one clear price in GBP. Buyers pay through your own PayPal account and we take 0% of your sales; PayPal's fee comes out as usual. Plans are $29 (Pro) or $59 (Business) a month, billed in US dollars, with a 7-day free trial and no card needed. Instagram Auto DM is included on every plan, so a follower who comments a keyword gets your product link in their DMs.

Because payments go straight to you, you're the seller for tax purposes. We don't add VAT at checkout or file returns for you, so keep an eye on the thresholds above.

1. Start a free trial and choose GBP as your store currency.
2. Connect your PayPal business account.
3. Upload your first product and set the price in pounds.
4. Add your store link to your Instagram or TikTok bio.
5. Download your sales report each month and keep it with your records.