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The main issue is, as I understand:
An example UK/EU customer paid 100 EUR.
- According to OnlyFans, they pay 80 EUR to the content creator, and keep 20 EUR for themselves.
- VAT applies to the whole price. That means, on the 100 EUR sale, around 20 EUR VAT should have been paid as UK & European tax. (Around 20 EUR, since different European countries have different VAT rates.)
Their real income was 20 EUR to begin with, and they had to pay hosting, programmers, salaries etc from that. Let's say their profit was 15 EUR.
"Sky News understands HMRC is currently reviewing whether the company should have been collecting VAT since its inception."
Now imagine that suddenly they have to pay years of missing VAT taxes retroactively. Let's say 10 EUR out of that 15 EUR.
(Yes, a lot of the transactions are non EU, but on the other hand there's a possible penalty.)
Do they have almost all their profits for the past years saved up as cash on their bank account? Not likely.
Also it's sure as hell they aren't going to get money back from the models saying "Sorry girls, some of the money we've sent you should have been paid as VAT, please wire it back."
But OnlyFans definitely won't close, worst case scenario they'll sell a part of the company for a money injection (or even the whole company).
The tax authority might even allow them to pay missing taxes in yearly installments. (I don't know if that's a thing in the UK.)
It's a lucrative platform, and it will be also lucrative if they pay VAT properly. (Add VAT to the prices and paying it as tax straight away - as opposed to paying it after the fact from their "profits".)
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