Tax Guide for Content Creators and Social Media Influencers

By Kate | January 13, 2023

Table of Contents

Introduction

Are you a digital entrepreneur who’s unsure about their tax responsibilities? Whether your hobby is vlogging, blogging, reviewing, or streaming, if you earn money (e.g., royalties and advertising fees) or receive gifts (e.g., products, holidays, or accommodation) from it, then HMRC could class you as having taxable income, and require you to submit a Self-Assessment tax return.

Our tax guide for content creators and social media influencers will answer all of your questions, from what counts as income and allowable expenses, to how you can register your business and pay the right amount of tax. Continue reading to find out more, see our dedicated content creators page, or contact us today for bespoke tax advice.

Should I Register My Blog or Social Account as a Business?

Many social influencers and content creators use their accounts and websites as creative outlets, but as their hobby evolves, they might start to earn money. From HMRC’s perspective, if you receive income, you’re most likely considered a business, which means you’ll need to register, and pay tax if the income exceeds £1,000.

If you’re not sure, ask yourself the following questions – if the answer to any is yes, then you should register your business and check your tax liabilities:

Motivation – would you like your blog or account to generate income, and become a full-time job eventually?
Advertising – do you currently sell ad space, or have the intention to do so?
Gifts – have you accepted product gifts (even if not cash) in return for a post or promotion?
Guest blogging – are you blogging on other sites to promote your own brand or boost traffic?
Monetisation – do you have a strategy in place to monetise your blog or social media account, to compensate for time invested?

Register as Self-Employed

With the government putting more attention into newer business areas such as blogging and influencing, it’s important to get your tax obligations correct. This way, you can avoid costly and time-consuming tax investigations. The quickest way to register with HMRC is to set up as a self-employed individual.

You won’t have to pay tax until your influencing income (not profit) exceeds £1,000 during a tax year – e.g., the 2022/23 tax year runs from 6^th April 2022 to 5^th April 2023. Once it does, you must submit a Self-Assessment tax return by 31^st January following the tax year in question (e.g., 31^st January 2024 for the 2022/23 tax year).

HMRC will automatically calculate how much tax you owe based on the information you enter, after deducting expenses, tax allowances and reliefs. If you’re employed elsewhere, this sits outside of the rules for a regular PAYE salary.

N.B. If you’re receiving regular payments from just one company rather than from a range of brands, you might be classed as employed, and need to pay National Insurance also – the rules around this can be complicated, so please seek professional advice.

The deadline for informing HMRC of self-employment is 5^th October following the end of the tax year that your earnings went over £1,000 (e.g. 5^th October 2023 for the 2022/23 tax year), even if you’re no longer earning income from your blog or social media account. You can also record expenses in a tax return to create a loss, which you can use against any future income for tax savings.

Register as a Limited Company

Generally, most bloggers and vloggers are self-employed, however, registering as a limited company can provide additional tax reliefs and creditor protection. Whether or not this is suitable for your business depends on your individual circumstances, your projected growth, your earnings potential, and how much income you’d like to take as salary. It also comes with more reporting responsibilities – please get in touch if you’d like to discuss.

What Is Taxable Income for a Blogger or Influencer?

As an influencer or content creator, you’re probably receiving gifts in exchange for writing about them on your blog, or sharing them on your social media accounts. Gifted products count as taxable income, and each product must be included in your tax return – rules around whether you should declare products at their retail price, real value, or market value, can vary, and should be decided by a qualified professional.

You should also have a contract that outlines your obligations in relation to the product(s) (e.g., in regard to wearing them, talking about them, or broadcasting them), and verifies the cost of the product(s). If you’re sent an item unexpectedly without an associated agreement, it’s not generally compulsory to report it as income – however, as above, the rules surrounding this can be complex, especially if you blog about similar items, if the gift creates revenue, or if you start receiving numerous items from the same or different sources.

Other types of taxable income acquired through influencing could be:

Royalties and advertising fees
Affiliate marketing commission
Guest blogging for other social personalities
Subscription services for your fanbase
As an influencer or content creator, you’re probably receiving gifts in exchange for writing about them on your blog, or sharing them on your social media accounts. Gifted products count as taxable income, and each product must be included in your tax return – rules around whether you should declare products at their retail price, real value, or market value, can vary, and should be decided by a qualified professional.
You should also have a contract that outlines your obligations in relation to the product(s) (e.g., in regard to wearing them, talking about them, or broadcasting them), and verifies the cost of the product(s). If you’re sent an item unexpectedly without an associated agreement, it’s not generally compulsory to report it as income – however, as above, the rules surrounding this can be complex, especially if you blog about similar items, if the gift creates revenue, or if you start receiving numerous items from the same or different sources.
Other types of taxable income acquired through influencing could be:
- Royalties and advertising fees
- Affiliate marketing commission
- Guest blogging for other social personalities
- Subscription services for your fanbase

What are Allowable Business Expenses for Content Creators?

When you’re a self-employed content creator, claiming for allowable business expenses is the simplest way to reduce your tax liability. Typically, most things that you pay for in your business will be tax deductible, and could include the following:

Marketing costs – website creation, hosting, PPC advertising, online SEO
Equipment – laptops, computers, cameras, phones, software, subscriptions
Insurance – for equipment
Travel expenses and mileage – airline and train tickets, work-related fuel costs (that aren’t to your regular place of work), hotels away from home and your place of work
Subsistence – food, drink, and entertainment in certain circumstances
Use of home as office – if you have to work from home
Utility bills – phone and broadband costs if you work from home
Subcontractor costs – photographers, consultants, or other freelancers you hire
Professional fees – agents, accountants, or legal fees
Recording and licensing fees – if you use professional studios and/or backing tracks for posts
Make-up, hair, and clothing – used for business photo or video shoots
Bank charges – from a business bank account

Expenses that are not tax allowable include parking fines, HMRC interest and penalties, and personal expenses.

Some expenses may be accrued by yourself personally, and by your business, e.g., your mobile phone. In these instances, you can only claim the business portion as a business expense (say 30% was used for personal and 70% for business, you can only claim 70% against your business’s tax bill).

Working Abroad

If you’re paid to work abroad (e.g., for a photo shoot or hotel review) by an overseas company, you might have to pay tax in that country, in addition to UK tax. You can usually claim tax relief on your Self-Assessment to get all or some of this tax back, depending on the double taxation agreement in place.

What Bookkeeping Do Influencers Need to Do?

It’s a legal requirement for content creators to keep documents that support their statement of income and expenses – such as agency statements, client invoices, receipt expenses, and business bank statements. You must keep hold of these for six years after the tax year submission – doing gives you supporting evidence if HMRC queries any figures on your tax return.

Please also be aware of the oncoming Making Tax Digital (MTD) rules in April 2024, where it will be compulsory to maintain digital records using MTD-compatible software – read more about MTD here.

Does My Content Business Need to File a VAT Return?

VAT (Value Added Tax) is a government tax on goods and services. You’ll only need to register for VAT if your business has as turnover of £85,000 or more – once registered, you must charge your customers VAT, deduct VAT you’ve paid to any suppliers, and submit VAT returns (usually quarterly).

Need Tax Advice for Your Content Business?

At Mercian Accountants, we work with a range of influencers and content creators, across a multitude of platforms in the entertainment industry. We can advise what works best for your business, so you pay the right amount of tax, at the right time, whilst making the most of available reliefs – in line with HMRC regulations. Contact our expert tax team today – just drop us a message through our online contact form, give us a call on 01743 562430, or email us at hello@mercianaccountants.co.uk.