Tax deductions for influencers and online creators
If you’re an influencer, such as a blogger, vlogger or an online creator, it is important that you are aware of your tax obligations. When reviewing your taxable income, certain expenses can be claimed for the work you undertake, which can help reduce the amount of tax you may need to pay.
It is important that you understand your obligations to declare income and pay tax. When self employed, there are tax deductions that can be made for certain expenses that you may incur. In this guide we highlight some of the most common tax deductions that you may be able to claim.
For specialist tax and accountancy advice for influencers and online creators, simply get in touch with our team.
When do influencers and online creators start to pay tax?
Influencers and online creators are usually self-employed. All self-employed people are required to submit a tax return once they earn over £1,000 in a single tax year, with tax being due when they exceed their annual tax-free allowance (currently £12,500 for the tax year 2020/21). The monetary value of gifts can also count towards this amount, as does accommodation given free or in lieu of a service or an expected service.
Tax deductions for influencers
If you are a self-employed influencer, be it a vlogger, blogger or a general online content creator, you are liable for tax on anything that earns you money or is capable of having monetary value (including royalties, advertising fees, appearance fees or certain gifts received). If your work takes you abroad (such as photoshoots or personal appearances) you will also usually be liable for tax in the UK on your overseas earnings, unless you are either a non UK resident or have non-domiciled status.
Because an influencer’s earnings are not always black and white, without professional advice, it can be complicated to understand how the rules apply.
Here are the types of expenses that you can claim for to reduce your tax bill (when they relate directly to work activity).
- Software (it could be email marketing software or image editing tools
- Subscriptions like stock image providers
- Marketing activities (from paid advertising fees to giveaways)
- A proportion of household bills that account for any increased working from home costs.
- Office costs (rent, chairs, desks etc)
- Equipment like computers, cameras, or laptops (if they are solely used for work purposes)
- Travel expenses (from airline tickets and train tickets to petrol costs incurred from travelling to alternative places of work, such as photoshoots or to undertake blog reviews, but not to your regular place of work)
- Accommodation (this only applies to hotels whilst working away from home as well as away from your usual place of work)
- Music licenses and music purchase fees, such as for use on your social media posts
- Non-gifted purchases that you bought yourself solely to review (and not subsequently used for personal use)
- Agents fees and commissions
Do influencers pay tax on gifts?
As mentioned above, if you’re an influencer or an online content creator, there are tax rules around gifts that you should be aware of.
If you have received an unexpected gift and there is no agreement relating to this item (specifically, no agreement regarding you wearing it, talking about it, or otherwise promoting it online) then you will not be required to report it as earnings.
This can, however, become complicated very quickly. If you regularly blog about similar items, or if the item in question generates revenue for you or your company, or if you begin to receive more items regularly from the same source, then you may face some tax implications. At this point, you will need to seek tax advice.
To confirm: You have a legal obligation to declare the value of all items received as payments in kind. It is strongly advised to always have a contract or related legal agreement which details your obligations as well as verifying the cost of these items.
Expert tax planning for influencers and online content creators
For advice and assistance with your tax obligations as an influencer, whether you’re a blogger, vlogger or a content creator, our accountants for influencers are here to help.