This tax guide is designed just for UK Influencers. While Influencers have changed how advertising works and the way people shop, it has bought with it a range of tax questions by Influencers.
This guide helps to clarify key topics like:
- Getting HMRC registered;
- Taxes that Influencers need to pay;
- Reducing your tax bill.
Should UK Influencers Register With HMRC?
Anyone who earns untaxed income of more than £1,000 during a tax year must register with HMRC and declare their earnings.
A tax year runs from 6 April to 5 April each year.
If you earn less than £1,000 then you may be able to take advantage of the HMRC Trading Allowance, avoiding the need to register and report to HMRC.
If you earn more than £1,000 then the simplest approach is to register as self-employed with HMRC.
When Should You Register With HMRC
You must register with HMRC by the 5th October following the tax year they started working as a Influencer.
So if you became an Influencer on 1 December 2018 then you’ll need to register by 5 October 2019.
Registering online is easy, but can take around 10 days to be completed.
Want to Register as Self-Employed? Read my free 10 Step Guide to Going Self-Employed
What Taxes Do Self-Employed UK Influencers Pay?
As a self-employed Influencer, you pay tax on your business profits (that’s all your income less all your expenses).
Anyone who is self-employed must pay the following taxes:
- Income tax;
- Class 2 National Insurance;
- Class 4 National Insurance.
Once registered as self-employed you are responsible for working out your own taxes.
The amount of tax and national insurance you pay will depend on how much profit you have made.
Want to estimate your taxes? Read my post on Self-Employment Taxes which shows you how to work out how much tax you’ll need to pay on your earnings.
Your HMRC Responsibilities as a Self-Employed Influencer
Once registered as self-employed you’ll be responsible for following the rules of self-assessment.
That means you will need to:
- Report all your earnings to HMRC by 31 January each year;
- Fill out a self-assessment tax return form;
- Calculate your own taxes;
- Pay all your taxes over by 31 January each year and 31 July each year, along with
a paymenton account.
A payment on account is a contribution towards your next years’ tax bill. You can find out more about that topic and how it works here.
Tax Deductions for Self-Employed UK Influencers
Claiming for all the expenses you can against your income is the simplest way to reduce your tax bill.
Some of the common tax deductions that UK Influencers claim for include:
- Website design & build;
- Web hosting;
- Monthly software or licence fees;
- SEO costs;
- Make-up for shoots;
- Camera and equipment;
- Mobile phone;
- Consultants or freelancers you hire;
- Agents fees;
- Use of home as an office;
- Travel and mileage;
- Legal fees;
- Accountants fees;
- Bank charges for a business bank account.
Whilst most things you pay for as part of being an Influencer are tax deductible. There are some things you may pay for that you cannot claim against your taxes. This includes things like:
- Fines and penalties eg: parking fines;
- HMRC interest and penalties;
- Food, except in certain circumstances;
- Personal expenses;
There may some expenses you pay for that you use personally and for business, like your mobile phone.
In these cases, you can only claim a portion as an allowable expense.
So if you use your mobile phone for 60% work and 40% personal, then you take 60% of the total bills to put against your taxes.
Bookkeeping and Record-Keeping for Self-Employed UK Influencers
One of the keys to reducing your tax bill is to stay on top of your bookkeeping and tacking all your expenses.
You’ll also need to make sure you keep all your receipts support all the expenses you want to claim, as well as details of what you have been paid.
The simplest way to do this is to:
- Open up a separate bank account for yourself and set this to send/receive any payments. That way when tax time comes you has a record of everything that has happened.
- Save all your receipts and reports using a bookkeeping app.
Quickbooks is a great option for self-employed people since you can photograph and store your expenses on the go, as well as using the app to automatically track your business mileage.
Ready to Go Self-Employed? Read my free 10 Step Guide to Going Self-Employed