I bet payment for him went through his books and the rest of them through hers
I’d be inclined to agree completely.
INFLUENCER TAX: HOW MUCH TAX DO I NEED TO PAY AS AN ONLINE INFLUENCER?
The first thing to say here is that there is no official ‘influencer tax’. What we’re talking about instead is the taxes associated with being an online influencer. For both brands and influencers alike, it’s crucial to know exactly what you’ve earned (and how you’ve earned it). This is in order to work out exactly what you owe.
Both full-time and part-time influencers need to
register as self-employed with HMRC. So, even if you have another job, perhaps one where you’re enrolled on PAYE, you must still pay tax on the income you’ve earned online. The amount of income tax you pay as a blogger or influencer depends on how much of your income is above the tax-free
Personal Allowance of £12,500 (as per 2020/21 tax year).
You can see a full list of tax codes, here. Or,
click here to find out what your tax code means.
As a self-employed, online influencer, you can also claim certain expenses for your daily work. This helps to reduce your taxable income, leaving you with a lower annual tax bill. You may be able to claim expenses against things like:
- Equipment (phones, laptops, cameras, etc.)
- Travel
- Phone & broadband bills
- Website expenditures
- Marketing costs
- Related training/courses
You may also qualify for certain types of
income tax relief, depending on your circumstances.
INFLUENCER TAX: SUBSIDISED CONTENT & ‘PAYMENTS-IN-KIND’
In spite of recent regulatory changes, a lack of advertorial transparency can make it tricky to distinguish between paid partnerships and organic content. In fact, much has been made in recent years of the income recorded by influencers, with concerns that “
social media stars may not be declaring when they’ve been paid, or rewarded, to endorse goods or services”. Whilst it’s fairly straightforward to tax sponsored or paid-for content (whereby there’s a fee agreed between parties), the waters are slightly murkier when it comes to ‘payments-in-kind’. This is where products or experiences have been given to a creator in return for contracted
deliverables. This can be anything from a food blender or a pair of shoes to a holiday or a brand new car. If it’s a gift in exchange for endorsement, it’s considered a payment-in-kind.
You’re legally obliged to declare the financial value of any items you receive as a payment-in-kind, in your annual tax return. To verify the cost of the item or service, you should refer to your agreement from which it was provided. Be aware of this before you sign, and make sure you obtain a hard copy of the agreement. You never know when might need it in the future.
A word of caution too to those brands who are reluctant to pay influencers a cash sum for their services. If you ‘gift’ an influencer or YouTuber a car or a holiday in return for particular deliverables, as above, HMRC requires they be declared as income earned. The issue, of course, is that they may not have the physical funds to service the tax they owe. Ipso facto, this tactic might not prove quite as productive in years to come.