Attention all UK social media creators and influencers! You might be at risk of a £100 fine from HMRC if you’re earning through your online activities and not reporting it correctly. A study by Tide has found millions in the UK are making money through their content, averaging £1,223 annually. Whether you’re earning cash or receiving gifts for your posts, it’s crucial to know about the £1,000 trading allowance.
Platforms like TikTok, Instagram, and YouTube offer fab opportunities to earn by featuring products or teaming up with brands. However, if your earnings or gifts exceed £1,000 in a year, you’re legally obliged to submit a self-assessment tax return. Yet, only 52% of content earners even know this, and less than half have filed a return.
Here’s the deal: If you miss the self-assessment deadline, fines start at £100 and can quickly add up, posing a substantial risk, especially for 18 to 24-year-olds. Think you’re getting freebies? As soon as a gift influences what you post, it could be taxable. For example, if you received £200 worth of skincare for a video or took on a paid partnership, it all adds up!
Penalties for failing to notify HMRC can really stack up. So, what’s the solution? Keep thorough records of earnings, whether cash or gifts, and possibly consider setting up a separate business account to manage it all. Tools like Tide Accounting can help you keep track of your finances and ensure you’re not caught out.
Influencer Megan Paul, who turned her Instagram page into a thriving business, advises seeing your side hustle as a serious venture. With the right guidance and tools, managing taxes doesn’t have to be daunting.
So, if you’re monetising your social presence, make sure you’re on the right side of the law and avoid costly penalties. Check out your earnings, and be proactive about those tax returns!