I know the tax chat is a few pages back but as a tax adviser I thought I would add my two cents! Sorry in advance if this is boring
Clothing, make up, bags etc would never be allowed as a deduction for tax. There have been a lot of tax cases on this! The tax rules state that clothing is worn primarily for the purposes for
personal decency and warmth. When clothing is used for work it will therefore have two purposes and cannot be exclusive.
There was a great case recently about an exotic dancer being allowed to claim lingerie as tax deductible because the judge ruled her outfits were a costume and neither decent nor warm. Usually having a uniform would suggest that you are employed rather than self employed so not relevant here.
The only ways I can think to get a deduction for tax is if the clothing etc was claimed to be a costume or if it was accounted for as stock but then the influencers would have to keep for a short time and then actively resell. Neither of which are true here.
Regarding furniture, if the furniture was for her office I would say OK for tax, but definitely not a £12.5k LV trunk in the living room!!
What I suspect is happening is the influencers do not have enough cash in their personal bank accounts so they pay for stuff from the business bank account. Then when the accountant does the accounts at the end of the year, the expenditure is put into a ‘directors loan account’ rather than shown as a business expense and basically a dividend for that amount is declared. It’s such a pain and they shouldn’t be doing it really. Hopefully their accountants are charging good fees!!
Also regarding gifted/discounted items, you would only need to declare it and include as income for tax is if the item (or gift voucher) was specially included as part of the payment from the brand, which I suspect does not happen often. I think usually most of the time brands will pay the influencer money and then also include the item/gift voucher/discount code as a thank you.
I guess in normal people terms for example, last week Boots gave me £10 of points for spending £60 in one go, which is a gift and I don’t need to tell the tax man.
I think because it’s a new industry (to use Lydia's fave word) HMRC will be quite keen to keep an eye on them so I would be wary when doing the tax returns.