- OnlyFans could be hit with a bill for three years' worth of unpaid taxes, according to reports.
- The content subscription platform has exploded in popularity under lockdown, with a reported 75% surge in signups under lockdown. It's become popular as a place for porn creators to cater directly to fans.
- The firm has started charging VAT on top of fans' monthly subscriptions, according to Sky News, with the company claiming the change is down to a new "interpretation" of the law.
- The UK's tax authority HMRC is now reportedly reviewing whether OnlyFans should have been charging this tax since launching in 2016.
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OnlyFans, the content subscription service based in London, is reportedly facing a bill related to three years' worth of unpaid taxes in the UK.
The social media platform allows users to set up a paywall around their profiles, where they can post content to a feed, receive and send direct messages, and post pay-per-view content. The site reportedly saw a 75% surge in sign-ups amid the COVID-19 pandemic and has a reputation for being popular with adult performers.
Last week, for the first time since launching in 2016, the firm started charging VAT on top of fans' monthly subscriptions, according to Sky News.
Previously, the firm was taxed as if it was an "agent" comparable to Uber, connecting customers with independent contractors, rather than a sales outlet in its own right.
Sky reports that HMRC, the UK's tax authority, is now reviewing whether or not OnlyFans should have been charging VAT since its launch, which could result in a penalty charge if it decides the company was "careless or deliberately inaccurate" with its tax returns.
A spokesperson for OnlyFans told Sky the change in VAT charges was "due to a recent interpretation of an EU law by HMRC" but declined to outline the details of this new interpretation.
"This represents a change of basis for VAT purpose, making OnlyFans the principal on the sale as opposed to the agent," the spokesperson added. "We have previously been paying over VAT on the basis of being an agent."
One content creator on OnlyFans, Miss Zelda, told Sky her subscribers now faced an additional 20% bill on top of her existing fees.
"My subscription price has stayed the same but my subscribers are being charged more on their end," she said. "So as a result I'm either going to have to lower my subscription or face a loss in subscribers."
A spokesperson for HMRC said: "We are unable to comment on an identifiable business.
"We ensure the tax system is fair for all businesses and that companies are paying all the tax that is due, reflecting the value they get from UK users."
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