Influencers and Tax! Are you a Social Media Influencer, Vlogger or Blogger? Did you know you may have to pay Tax on your online earnings?
What is a Social Media Influencer, Vlogger or Blogger?
The above terms are effectively referring to online/ digital entrepreneurs, using various types of Social Media. Examples of such platforms are YouTube and Instagram to name a very few.
Why does an Influencer need to think about Tax?
The online content creation industry has grown rapidly over recent years. This has led to a surge of influencers being able to connect with thousands if not millions of fans. Meaning this can be done at the touch of a button across the globe. These professions are relatively new to the working world. Many influencers, bloggers, etc, don’t think they need to worry about any tax being owed to HMRC. As a result, many don’t see it as paid work and merely a hobby. In fact, the industry per Mediakix is estimating the actual worth will hit between $5-$10 billion dollars by 2020.
When do Influencers need to think about Tax?
A hobby, such as uploading online content for any gain ceases to be a hobby when it surpasses the £1,000 Trading Allowance.
The £1,000 tax free trading allowance was introduced in April 2017. Individuals with trading income of £1,000 or less therefore no longer need to declare or pay tax on this income. The £1,000 trading allowance can also be used for trade with little to no expenses.
If you are earning money from online content such as endorsements, advertising, royalties or even receiving gifts or products of monetary value over £1,000. Therefore you are likely liable for Tax and will need to submit a Tax Return with HMRC.
Failure to register and submit a Tax return where Tax is due may result in Penalties, Charges and Interest.
If you believe you have earned enough money where tax may be liable, get in contact with a reputable accountant. An accountant with experience in this field will be able to assist with advice. The area is complex but they will be able to assist you with when the Tax is due and what expenses are claimable against your income.
DISCLAIMER – Please note that the content contained in this article is for general information only and is not a substitute for professional advice – read our full disclaimer