HMRC Chases 4,300 Influencers and Content Creators Over Tax

By Kate | February 20, 2023

To keep up with the rapid expansion of the digital economy, HMRC is chasing thousands of influencers and content creators, including gamers and retailers, for taxes that haven’t been paid on income or gifts received online. This includes people who earn money in exchange for product promotion, as well as those who are paid by platforms for content engagement. Carry on reading to find out more, or contact us today for further advice.

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Who Has Received an HMRC Nudge Letter?

HMRC routinely collects information from online platforms and conducts investigative work for those who may owe tax. The result? They’ve already written to 2,300 people who post on platforms such as Instagram, TikTok, and YouTube, and intends to send another 2,000 nudge letters to those selling through online marketplaces including eBay, Etsy, and Facebook. HMRC hasn’t yet disclosed how much tax they believe has been unpaid, but must believe it to be a significant amount if they are sending out these letters.

If you’ve received one of these nudge letters, you shouldn’t ignore them – if you co-operate, and your error wasn’t intentional, you’ll usually avoid any penalties for unpaid taxes. HMRC also offer late payment plans if you can’t afford the tax you owe, however please be aware that interest will be charged. Or, if you believe you should be paying tax but haven’t yet been contacted, call us for advice.

Low Tax Awareness for Content Creators

Online content creation has experienced rapid growth over the past few years, with software company Adobe discovering that the number of creators had doubled to 16 million between 2020 and 2022 – mostly as additional income (around £120/hr) to full-time employment. However, many of these people are young (in their teens or twenties), and rather than dodging tax owed, are unaware that they need to pay tax on earnings or gifts received.

Should You Disclose Online Income to HMRC?

Many believe that they don’t need to report income until it exceeds the tax-free allowance, currently £12,570. However, this is incorrect – any online gross income above the tax-free trading allowance, currently £1,000 per year, must be reported, as HMRC will consider you a trader. This applies whether you received money from the UK or elsewhere – and even if you didn’t carry out the activity for the purpose of making a profit.

Earnings above this threshold are subject to income tax, and must be filed through a self-assessment tax return. Or, if you’ve chosen to incorporate a business, you would instead be subject to corporate taxes.

Need Advice on Content Creation Tax?

Are you a social influencer or content creator who’s unsure of their tax position? Have you already received an HMRC nudge letter? We work with online earners across a range of platforms, so we know exactly what’s required. Contact our Accountants for digital entrepreneurs today – you can message us through our online form, call 01743 562430, or email hello@mercianaccountants.co.uk.