UK tax considerations for content creators and social media influencers
Do you consider yourself an influencer? Are you earning money from the content you create on channels like TikTok, Instagram, Twitch, Patreon and YouTube? Or do you promote brands online and receive products for free in return for your content?
If so, did you know that you may well have UK tax liabilities and do you know what you need to do to be tax compliant?
Some basics
Most influencers who earn money from their content will receive income from sponsored posts, as brand ambassadors, or through some kind of subscription model, but it’s possible to earn taxable income in other ways, for example did you know that receiving free products in return for advertising them online might count as trading income even if you receive no cash?
It’s perfectly normal for social media influencers to have a ‘normal’ salaried job where tax is deducted at source (via PAYE) and it’s therefore not always obvious that income earned from your side hustle online might count as a separate business. If you are earning more than the trading allowance of currently £1,000 in income (ignoring your expenses) in a tax year (6 April to 5 April) from your online content, then you should be reporting this to HMRC as a self-employment business.
What do I need to do if I’m making more than £1,000 in income outside of my employment?
There are a few requirements if you have a self-employment business. First and foremost you need to ensure you register with HMRC as self-employed. This needs to be done by 5 October following the end of the tax year you first start your self-employment and is a one-off job.
You then need to file a UK self-assessment tax return every year by 31st January following the end of the tax year for as long as you continue your self-employment business.
What happens if I started creating content years ago and didn’t tell HMRC?
First things first – don’t panic. If you’ve been creating online content for some time but this is the first time you’ve thought about potential tax liabilities then the good news is we’re here to help. If you’ve never filed tax returns before, or you have but you’ve missed off income earned from influencing and online content, then we will probably recommend that you make a submission to HMRC using their Digital Disclosure Service. This facility exists specifically to help regularise your historic tax affairs.
We have helped hundreds if not thousands of clients prepare these voluntary disclosures over the years and know how to resolve these cases quickly, causing minimal disruption and stress for you.
So what do I do now?
The best thing you can do if you think you have a UK tax liability but have never done anything about it is come forward voluntarily before HMRC make contact with you. HMRC’s powers to gather data from online sites are only increasing over time, so it’s a fair assumption that the sites you use to post your content will eventually be sharing their data with HMRC directly. If HMRC write to you first, the financial penalties can be significantly higher, and you will lose control over the whole process. In short, if you’re worried you might have a tax problem, don’t ignore it or try waiting it out. You’ll only put yourself in a worse position in the long run.
How we can help at Menzies?
We have a team of tax experts at Menzies and we are one of the leading firms in the UK who specialise in tax disclosure work. If you have any questions or worries, reach out to us now and we’ll get back to you.
Call our free confidential hotline – 07813003194
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