Is affiliate marketing legal in UK? Yes, affiliate marketing is completely legal in the UK, given that you follow the Advertising Standards Authority’s UK Code of Non-Broadcast Advertising and Direct & Promotional Marketing (CAP Code) and the Federal Trade Commission’s Endorsement Guides. Affiliate marketers must also comply with the European Union’s General Data Protection Regulation (GDPR).
According to the Statista Research Department’s March 2024 article, affiliate marketing spending in the UK grew by 322 million GBP (British Pound Sterling) from 2018 to 2021. This means that this industry is growing rapidly despite the different laws and regulations stipulated by the UK government. While affiliate marketers can earn an average of $800-$5,000 in affiliate income monthly, this business model takes time and effort to scale. Also, abiding by local and international policies is crucial. It prevents you from being tagged as an illegal affiliate marketing business.
Joanna Bailey, Senior Associate at Giambrone & Partners LLP in London, England, wrote in an HG.org article that affiliate marketing scams through social media platforms in the UK are growing. These fraudsters use popular media personalities to promote fake broker schemes. In fact, the National Cyber Security Centre (NCSC) removed over 730,000 websites because of fake promotions. This is why affiliate marketers must know the legal requirements, the rules and regulations, and the legal affiliate programs in the UK. Gaining in-depth knowledge of illegal affiliate marketing activities will help you in the long run.
Is Affiliate Marketing Legal in UK?
Yes, affiliate marketing is legal in UK. Affiliate marketers must comply with the Advertising Standards Authority’s CAP Code. This advertising code ensures that online marketers and advertising groups must follow the legal rules in promoting specific products and services. Besides this rule book, UK affiliates must also understand the FTC’s regulations for proper disclosures on building affiliate websites.
What is Affiliate Marketing UK?
Affiliate marketing UK is a type of business model where online entrepreneurs called “affiliates” or “affiliate marketers” promote the products and services of big and small businesses in the UK. This advertisement comes in the form of blogs, video content, social media posts, or other creative ways of selling affiliate products using an affiliate link. By doing so, marketers earn affiliate income through commissions. And according to the Internet Advertising Bureau (IAB) UK, affiliate marketing contributes 1% to the country’s GDP performance.
What are the Affiliate Marketing Rules and Regulations in the UK?
ASA’s CAP Code and FTC’s Endorsement Guides are the affiliate marketing rules and regulations in the UK. These laws and standards protect customers, businesses, and UK affiliates from potential frauds and scams. They regulate how affiliate marketers promote their websites, links, and products.
What are the Legal Requirements for Affiliate Marketers in the UK?
Affiliate disclosures, affiliate program terms and conditions, customer consent for marketing promotions, and affiliate marketing regulations are the legal requirements for affiliate marketers in the UK.
First, state affiliate disclosures. An affiliate marketer should clearly disclose affiliate relationships with different affiliate partners. This informs potential customers that you gain commissions through affiliate marketing links by promoting other businesses’ or people’s products or services. These disclosures must be conspicuous and not hidden.
Second, read through an affiliate program’s terms and conditions. You should absorb all the minute details of your chosen affiliate program’s terms and conditions. This way, you know what to avoid doing to steer clear of legal repercussions.
Third, obtain customer consent for marketing promotions. It is crucial to get consent from your potential customers before sending them marketing emails or promotions. Moreover, there should be an “unsubscribe” option in your email campaigns.
Lastly, understand affiliate marketing regulations. Before starting your affiliate marketing business, you should understand the local and international laws applicable to affiliate marketing activities in your country. Besides these legal requirements, you must consider affiliate marketing pros and cons to see if this business model is for you. Equipping yourself with the necessary knowledge is crucial to succeeding in this industry.
Do You Have To Pay Tax on Affiliate Marketing UK?
Yes, you have to pay tax on affiliate marketing UK. According to the UK’s national website, affiliate marketers have to pay self-employment taxes, which include income tax and Class 2 and Class 4 National Insurance. The income tax for the basic rate (£12,571 to £50,270) is 20%, the higher rate (£50,271 to £125,140) is 40%, and the additional rate (over £125,140) is 45%. For years 2024 to 2024, Class 2 National Insurance is £3.45 a week while Class 4 National Insurance is 9% on profits between £12,570 and £50,270 and 2% on profits over £50,270. The good thing is that UK affiliates aren’t taxed for the first £12,570 of their earnings because of the Personal Allowance.
What are the Best Legal Affiliate Marketing Programs in the UK?
Amazon Associates UK, Etsy, eBay Partner Network, CJ Affiliate, and Shopify are the best legal affiliate marketing programs in the UK.
The first one is Amazon Associates UK. According to a study published by Daniela Coppola in Statista, Amazon Associates UK is the leading e-commerce platform in the UK, reaching $15.3 billion in net sales in 2022. They have a commission rate of 1%-20% per sale (depending on the product category). Amazon Associates UK has over 600 million products and a 24-hour cookie duration.
Next is the Etsy affiliate program. The 2021 Global Etsy Seller Census shows that there are about 960,000 active Etsy sellers in the UK alone. And David Curry’s article on the Business of Apps website unveils that Etsy’s revenue grows by 10.1% year-over-year. This creative goods platform has a commission rate of 5% and a 30-day cookie window.
The third one is eBay Partner Network. This affiliate marketing program had a $9.8 billion net revenue in 2022 based on a February 2024 study by the Statista Research Department. It also has 1.3 billion active listings, making it one of the top affiliate programs in 2024. eBay Partner Network has a 1%-4% commission per product sale and a 24-hour cookie time frame.
The fourth one is CJ Affiliate, previously Commission Junction. It is an affiliate network with over 600 top brands and more than 1 billion customers reached monthly. They are known for their 43% YOY growth in influencer commissions and over $15 billion in potential revenue yearly. CJ Affiliate’s commission rates vary depending on the affiliate program you choose.
And the last one is Shopify. This Canadian e-commerce platform has merchants from across 175+ countries and has over 4.4 million active users daily on average. It has also contributed about $319 billion to global economic activity. Shopify has a commission rate of $150 per online sale and a cookie duration of 14 days.
3 Illegal Affiliate Marketing Activities To Avoid Doing in the UK
1. Having No Affiliate Disclosures
As an affiliate marketer, it is pivotal to have affiliate disclosures on your website. You must disclose your relationship with an affiliate partner or program. Failing to declare disclaimers properly in the UK will directly violate CPUTR 2008 and can lead to monetary penalties or legal disputes. Your website can also be shut down along with your pending affiliate commissions.
2. Not Paying Affiliate Income Tax
Every UK affiliate must pay their respective income tax for the affiliate revenue they receive. Tax evasion in the UK is grounds for six (6) months of jail time or a fine of up to £5,000. This penalty can go up to seven (7) years of jail time and an unlimited fine. Besides legal repercussions, your affiliate marketing business can be tagged as an affiliate marketing scam.
3. Partnering With an Illegitimate Company/Brand
This situation has grave consequences. That’s why potential affiliates must carefully review their chosen program’s terms and conditions and do an in-depth background check on the company behind it. Affiliates can also be subject to criminal charges and fines if the brand is found to be illegitimate. One good example was when My Online Business Education (MOBE)’s affiliates were charged around $4 million dollars for helping market a fraudulent business coaching scheme in March 2020.
What is Lego Affiliate Program UK?
Lego Affiliate Program UK is an affiliate program by The LEGO Group, a toy manufacturing company founded in Billund, Denmark in 1932. The LEGO.com Affiliate Program is managed by the Rakuten Advertising affiliate network. After signing up to be a LEGO affiliate, you will get access to an online kit (branded product links, texts, and banners) and earn commissions by promoting their links to your websites or social media platforms. The UK affiliate program offers a 5% commission and a 30-day cookie duration.
Does Affiliate Marketing Work in the UK?
Yes, affiliate marketing works in the UK. According to Statista, affiliate marketing spending in the UK rose to £793 million in 2021, compared to £471 million in 2018. This means the industry is growing at an average of 8% yearly. The affiliate marketing market in the UK is now valued at over $12 billion. And a 2022 Digital Adspend study by the IAB UK and PwC showed that the UK’s digital ad market reached £23.5 billion in 2021. Thus, businesses and potential affiliates are venturing into the affiliate marketing industry. Some even join the best affiliate marketing courses to get a kick-start in building their online business.
How To Start Affiliate Marketing UK?
To start affiliate marketing in the UK, you need to choose a profitable niche. A potential affiliate must research what niches are the most profitable by checking industry trends and market movements.
Next, sign up for a reputable affiliate marketing network. You must choose legitimate affiliate networks or partners that have good commission rates. This step is crucial as it allows you to select networks with reasonable terms, conditions, and payment processes.
Then, pick high-selling products or services. High-ticket affiliate products that have high demand are the most cost-effective to sell. You can sell a few of these but still have a sizable income.
After that, promote your affiliate links using creative content. Whether it’s organic or paid, your content must be creative, engaging, and relevant. This move will help you drive traffic and convert more customers.
Next, develop timely digital marketing strategies. Affiliate marketers should create trendy and clever digital marketing techniques to capture consumers’ interest. Your marketing efforts must be simple but clear.
Then, track your online campaigns with modern tools. Google Analytics is one of the best online tools you can use. It provides insights into how well your campaigns and websites are performing. You can also use Ahrefs (keyword research), Grammarly (content writing), Canva (graphics), and many more.
Finally, utilize social media marketing and influencer marketing. You must expand your marketing communication tactics and use social media platforms and sponsored content to reach more customers.
How Much Do Affiliates Make in the UK?
Affiliates in the UK make around £43,200 ($53K-$56K), according to Glassdoor. This is achievable since affiliates globally earn an average of $65,000 yearly in passive income. Affiliate commissions in the UK are given through direct deposit, checks, or vouchers/coupons, depending on the affiliate program’s payment scheme.
Is Affiliate Marketing Legal?
Yes, affiliate marketing is legal. Affiliates must abide by local laws, international regulations, and national governing bodies. For example, the European Union has the General Data Protection Regulation while the US has the Federal Trade Commission. Each country has its own specific set of rules to follow.
Kirsty McCubbin from the UK is one of the top 10 most successful affiliate marketers, according to a 2020 article by Outgrow. This shows how legal and profitable the affiliate marketing industry is. Additionally, an article by the Influencer Marketing Hub states that affiliate marketing spending in 2024 will reach $15 billion compared to this year’s $14 billion.
What are Affiliate Marketing Rules and Regulations?
Affiliate marketing rules and regulations are local and international policies sanctioned by national governing bodies to regulate affiliate marketing activities. This set of rules guides businesses, affiliate marketers, affiliate programs, affiliate networks, and other individuals involved in the legal ways of doing affiliate marketing.
For a website owner, the Federal Trade Commission’s Endorsement Guides need to be followed. It compels you to use proper affiliate link and affiliate website disclosures. Moreover, the Advertising Standards Authority (ASA) is another organization that monitors online marketing communications to prevent misleading advertising.
What is ASA Affiliate Marketing?
ASA affiliate marketing is the common term for the Advertising Standards Authority (ASA) which governs the regulations for promoting affiliate products and links online. The ASA implemented the CAP Code in 1962 to keep marketing communications clear and legal.
Is Affiliate Marketing Easy?
Yes, affiliate marketing is easy to set up. You just need to join legitimate affiliate networks or programs. These are free, and the signup process is usually simple. Low startup costs, numerous affiliate partners, social media promotions, and various affiliate marketing resources make it easy. While this is true, some potential affiliates still ask, “Is affiliate marketing easy or hard?”
Affiliate marketing is difficult in some ways. High market saturation, niche selection, traffic generation, and content creation make it a challenging business model to scale. You need significant time and effort to do in-depth research and learn the skills required to be a successful affiliate marketer.
Do Affiliate Marketers Need Business Insurance?
No, affiliate marketers don’t need business insurance. However, getting one protects you from possible lawsuits arising from the affiliate products you are promoting. The type of insurance you should get depends on the products or services you advertise. For example, general liability insurance is good for protecting yourself from situations like personal and advertising injury and acquiring legal defense and judgment.
What are Affiliate Marketing Websites?
Affiliate marketing websites are online sites that affiliates use for advertising their affiliate links, products, or services. These websites promote specific products and brands through blogging, vlogging, social media posting, or other digital marketing methods. They help marketers build an online presence and a solid reputation.
Why Do Affiliate Marketing Websites Need Proper Disclosures?
Affiliate marketing websites need proper disclosures to avoid legal drawbacks and penalties. According to the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR 2008), affiliate marketers must clearly state affiliate disclaimers to inform customers that they receive commissions from the links they promote. This includes all traders that are advertising to the UK market. Alternatively, UK affiliates need to follow the FTC’s regulations when marketing to the US.
Yes, you need to make a disclosure to your consumers as standard advertising practice in the UK to avert possible litigations. It is undeniably important for affiliates to disclose commercial relationships with advertisers. Failing to comply with this rule leads to a criminal penalty. First-time violators incur a warning from the UK authorities, while persistent violators are met with prosecution and fines.
What are Affiliate Marketing Programs?
Affiliate marketing programs are creative approaches of businesses and brands to drive more sales to their products or services. They compensate affiliate marketers (publishers, vloggers, influencers, and advertisers) with a specific commission percentage for every sale they forward. These programs have their own terms and conditions. Affiliate marketing programs are often associated with affiliate networks to give more exposure.
Affiliate Marketing Related Articles
Local Lead Generation is More Scalable and Profitable Than Affiliate Marketing
Affiliate marketing is legal and profitable in the UK. In fact, an article by Tandem8 stated that British consumers made about 175 million purchases through affiliate websites in 2020 alone. This amounted to £15.4 billion in revenue and a 14% annual growth rate. While this industry is lucrative, it is also strict about laws and regulations. Affiliate marketers should follow the Advertising Standards Authority’s CAP Code and the Federal Trade Commission’s Endorsement Guides to operate as a legal affiliate marketing business in the UK.
Affiliate marketers make around $5,000 to $100,000 annually, and it can go up to over $150,000. However, according to the Influencer Marketing Hub, only 7.94% of affiliates earn $100K-$150K. Succeeding in this industry requires extensive time, money, and effort to learn comprehensive foundational knowledge, marketing strategies, and high-level skills.
The local lead generation business model is more scalable and profitable than affiliate marketing. You don’t need to own physical products, market multiple affiliate links, or think of highly saturated markets. By creating local service sites that are organically ranking on Google, you get more traffic because your target audience is specific and ready to buy. You can then forward these leads to local businesses to make around $20K-$50K in passive income monthly.
