Are there any tax issues when paying affiliates?

[rogoff]

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We're planning to set up a new affiliate programme for our new web app, Resource Guru (resourceguruapp.com). I was just wondering if there are any tax implications for running an affiliate scheme? Can we just pay people without having to worry about their income tax? Regardless of where they are in the world? We're based in the UK. I seem to remember having to complete an IRS form when I signed up to a US-based affiliate programme a while ago.

[opensesame]

With affiliate window you have a credit limit, so lets say £10,000 a month, they will pay the affiliates and at the end of the month they invoice you for the comm they have paid out.

Nice site you got there, how that competition going, does that ipad2 draw in some signups?

[rogoff]

Hi, thanks for the info and kind comments. We are planning to run our own affiliate programme using Zferral. If we paid, for example, an individual in the UK £500 per month in commission, would we be responsible for paying their income tax (PAYE)? Or would we need to get their National Insurance number, or check that they are eligible to work or anything like that? Or are we completely free to pay anyone we like as much as we like without worrying about any regulations whatsoever?

Yes, the iPad prize draw does seem to increase sign ups and also incentivizes people to mention us on Twitter etc. Worth doing.