You might not have realised that you just started a business from your Instagram account and a hobby has now become your day job, with tax to pay. Guidelines for bloggers and influencers aren’t too clear, as it’s very current… We outline the main things you need to know to remain compliant.
Am I a paid blogger or influencer?
If you regularly spend time producing posts or reviews that have a commercial value, it’s likely that you are trading.
If you are given “freebies” in exchange for a social media post, it is very likely that you are a paid influencer. Freebies can be many things, such as clothing products, holidays, subscriptions, food, or people’s services, and also includes the loan of a product in some cases.
With the new laws that enforce transparency with followers for product placement HMRC can easily see which bloggers should be paying tax, and if they aren’t doing so, HMRC will start an enquiry into your tax affairs.
What do Influencers need to pay tax on?
When an influencer receives a product to review and post about in exchange for raising that products profile, the value of that product represents your income, and should be subject to tax.
Similarly, if you receive a free holiday to post a review of, or a loaned item in exchange for an expected post, the value of those items is your income.
Do gifts count towards my income?
If you are gifted items to keep instead of being paid in exchange for a post, then the value of that item is your income.
If you are gifted an item and there is no expectation in return for a post or no formal agreement then this is regarded a true gift and does not need to be declared.
I’m a paid Influencer! What do I need to do?
As soon as you start earning from your posts you need to register with HMRC for Self-Assessment and start logging your expenses to offset against your income and save tax.
Some of the expenses that Influencers can deduct against income to lower their tax position (if the expenses are met personally and not refunded) are:
- Website or internet costs
- Proportion of phone bills
- Photography costs
- Software costs
- Computer/camera equipment
- Travel costs
- Working from home costs
- Online boosts
And so on…
An annual tax return will need to be submitted to HMRC with details of your annual accounts (income and expenditure), together with your tax payment.
Tips to make your online life easier
- Set up a ‘business’ bank account separate from your personal account to receive all income and pay all expenses.
- Set up Receipt bank app, which enables you to scan your receipts and log them for you.
- Use cloud based accounting software that will automatically sync with the bank account you set up and your receipt bank app.
How we can help you
As one of the UK’s leading advisers to the Media and Entertainment sector, our experienced teams in both Tax and Business services can guide you on how to be most efficient in terms of keeping records and minimising your tax position.
Our Business Services Group use cloud based accounting solutions to reduce our clients’ fee costs and allows us to provide up-to-date financial reporting.
Our tax services are tailored to provide you with up to date and cost saving tax planning throughout the year.
