Taxes On Earnings For Twitch Streams

Twitch is a very popular platform where millions of people come together every day to chat, interact and make their own entertainment together. If you’re earning money on the streaming platform either as an affiliate, a partner, or via donations, you’ll need to pay income taxes.

If your revenue is more than £1,000 you will need to register at the HMRC as a self-employed. You will need to file an annual Self-Assessment tax return each tax year. The first £12,500 you earn within a tax year from your revenue sources combined are tax-free. Above that amount, you need to pay taxes on. These sources can range from wages, freelance work, etc.

“So what are the types of taxable revenue from Twitch?”

All money received from Twitch is taxable – ad revenue, subscriptions, donations, and bits. All revenue from Twitch needs to be reported. See below for more information.

  • Donations: Donations on Twitch are not the same thing as money received by charities, which are tax exempt, instead they are considered as income by HMRC. This means you will need to count donations towards the £1,000 threshold. You will need to report your gross income.
  • Ad Revenue: In terms of ad revenue, Twitch functions similarly to YouTube. You will get a portion of the ad fees companies are paying to place an ad on your channel. This revenue is also taxable.
  • Subscriptions: You can become an affiliate or partner and receive money on channel subscriptions. Affiliates get 50% of the subscription fees, while partners sometimes get more. The amount you receive is the amount you need to declare.
  • Bits: Subscribers can purchase bits to use emojis to chat rooms. Twitch pays streamers a portion of the bits’ price.

“So what is the registration process at Twitch?”

Once you’ve registered at Twitch you’ll need to do a tax information interview, which is essentially an online form you fill in. With Twitch being a US company, all Twitch streamers will need to fill out this form. Once you have filled out the form you will then submit it to the IRS, US tax office. You need to complete this form to avoid 30% fee deducted from your earnings. If you notice that Twitch is deducting 30% from your income, this means that the tax information interview was not completed correctly. If this happens, contact Twitch directly. Twitch will request your tax identification number (TIN), or for individuals, this is your NI number or, for companies, your UTR number. You will also need to fill in a W-8BEN form, which you can find here.

If you’re still confused or need some extra help then please contact us. We will help you every step of the way and provide you with tax and financial advice. We will even do all your paperwork and bookkeeping, all you have to do is provide us with your accounts along with all your invoices and bank statements so we can get everything together, filled out, and sent away in a timely fashion.

So please don’t hesitate to contact us.