Do you have to pay tax on social media income?
Being a social media influencer can be exciting—and rewarding. From sponsored posts to free products from brands, there are plenty of perks. But when it comes to taxes, things can get tricky.
If you’re earning money or receiving gifts as an influencer, it’s important to understand how taxes work. Are those freebies taxable? What counts as income? Are you technically “trading” in the eyes of HMRC?
This guide breaks it all down. We’ll explain what it means to be a social media influencer, what income is taxable, and how to stay on top of your tax obligations. By the end, you’ll have a clear understanding of how to handle taxes as an influencer and stay compliant with HMRC rules.
What Is a Social Media Influencer?
A social media influencer is someone who uses digital platforms—such as Instagram, YouTube, TikTok, or a personal blog—to create and share content that influences the opinions and purchasing decisions of their audience. These influencers earn income through brand sponsorships, affiliate marketing, advertisements, and viewers’ subscriptions.
Whether you’re a full-time content creator or a micro-influencer with a small but engaged following, your earnings are subject to taxation in the UK.
Are Social Media Influencers Taxed?
There’s no special “influencer tax” in the UK. Influencers must pay taxes like any other self-employed individual or business. However, due to the unique nature of influencer income—such as payments in kind or sporadic earnings—calculating tax obligations can be more complex than in other industries.
Payments in Kind and Taxable Income
A significant aspect of influencer income involves receiving gifts or products in lieu of—or in addition to—cash payments. This type of compensation, referred to as “payments in kind,” must be declared to HMRC if it’s part of your income through trading.
For instance, if a brand provides you with high-value gadgets, clothing, or luxury items in exchange for promotion, these gifts represent taxable income. The value of the item is determined by its market price—the amount someone would pay for it on the day you received it.
However, non-transferable experiences such as an all-expenses-paid trip may be considered tax-free if they cannot be sold for cash.
What Counts as Trading for Influencers?
Figuring out if an influencer is “trading” can be a bit tricky. Essentially, trading means running an organised activity to make money. According to HMRC, if you’re regularly putting time into creating and promoting content to earn income, there’s a good chance you’re trading. To find out more about other special taxes like this one check here
Examples of trading activities include:
- Regularly creating videos or sponsored posts.
- Sharing affiliate links and earning a share from product sales.
- Partnering with brands for paid endorsements.
If your social media presence is more of a hobby, the income you earn may be considered miscellaneous income instead. Regardless, gifts and payments in kind exceeding the £1,000 trading allowance must still be declared.
Taxes Influencers Must Pay
Below are the primary types of taxes influencers and content creators are required to pay in the UK:
Income Tax
- Personal allowance threshold: £12,570—Income below this is tax-free.
- General income tax bands:
- Basic rate (20%): £12,571–£50,270
- Higher rate (40%): £50,271–£125,140
- Additional rate (45%): £125,141 and above
National Insurance Contributions (NICs)
- Class 2 NICs apply if your profits exceed £6,725 annually.
- National Insurance Contributions have changed drastically, to avoid any mistake, read here to find out how rising NIC can affect you as a social media influencer.
VAT (Value Added Tax)
If your taxable turnover exceeds £90,000 in a 12-month period, you must register for VAT and charge VAT on qualifying services.
Commonly Asked Questions About Influencer Income
Is TikTok Revenue Taxable?
Yes, income earned through TikTok's Creator Fund or other monetisation streams is taxable. Remember to declare gross income (before any platform fees are deducted).
Do I Pay Tax on OnlyFans Income in the UK?
Yes, OnlyFans revenue is treated as taxable income. If your profits come from subscriptions or tips, this income must be declared and included on your tax return.
Do YouTubers Pay Tax on Their Earnings?
Absolutely. Whether it’s advertising income, Google AdSense payments, or sponsorships, YouTubers are required to declare these earnings. Payments in kind, such as gifted video equipment, may also be taxable.
What Income Is Not Taxable in the UK?
Certain incomes fall outside the taxable income bracket. For example, selling personal belongings valued below £6,000 or one-off gifts unrelated to your trade may not attract tax.
Claiming Expenses as an Influencer
Influencers can reduce their taxable profits by deducting allowable business expenses. HMRC defines these as costs incurred “wholly and exclusively” for the purpose of running your business.
Common Allowable Expenses
- Equipment for content creation, such as cameras or laptops.
- Software subscriptions and editing tools.
- Travel expenses for brand-related meetings or shoots.
- Internet and phone bills (the business portion).
- Advertising and promotion costs.
Non-Allowable Expenses
- Clothing purchased for personal use, even if worn in shoots.
- Entertainment expenses, such as hosting promotional events.
- Fines or penalties incurred.
Accurate record-keeping is essential for validating claimed expenses. Store receipts and contracts for at least five years.
Why Tax Compliance Is Critical for Influencers
The influencer economy is growing rapidly, attracting greater scrutiny from HMRC. Failing to declare income—whether from gifts, sponsorships, or digital platform earnings—can result in penalties.
Additionally, HMRC has started issuing letters to social media influencers, encouraging them to review and update their tax situation to avoid compliance issues.
How Debitam Simplifies Influencer Tax Management
Tax season stressing you out? Don’t worry—we’ve got you covered! At Debitam, we make tax compliance simple and hassle-free for influencers and content creators.
From making sure all your income is declared to spotting those sneaky allowable expenses, our team handles it all so you can focus on doing what you love. Whether you’re tackling self-assessment or confused about payments in kind, we’ll make it easy for you.
Ready to say goodbye to tax headaches? Get in touch today and let us take the weight off your shoulders while you focus on growing your brand!
