ZINE’s Essential Tax Tips For Influencers
Tax can be a daunting topic that hangs over you throughout the year but it’s super important that you tackle it head on. We’ve devised a simple guide covering when you need to register as self-employed, what you need to pay and those all important deadlines, tax deductions and responsibilities to help you along the way.
When should you register as self employed?
As soon as you start earning as an influencer you should register yourself as a limited company, no matter how small or large your earning is. Registering as a limited company means that you are the owner and employee of your blog/social channel. In order to do this, all you need to do is set up a PAYE (Pay As You Earn) – simple, right?
Registering as self employed:
You can register here, you will also need to complete a Self Assessment tax return by the 5th October in preparation for your personal tax return which needs to be submitted by 31st January for the previous year. The tax year works from 6th April – 5th April the following year.
What to expect after registering for Self Assessment:
The process usually takes up to 10 days from the date you register online. During this time you will receive two letters.
1st Letter – includes your UTR (Unique Taxpayer Registration) and confirmation of that your self assessment record is set up.
2nd Letter – includes your online activation code. It is super important that you activate this within 28 days otherwise you’ll have to restart the whole process again. Yes, you read that right, straight back to step one you go.
When do you need to start paying tax?
In the UK everyone has a tax allowance of £10,600 for all of their earnings added together. So, even if you’re not a full time influencer, you will have to add your earnings to your regular salary and if it reaches over £10,600 you will then need to pay 20% of what you’re earning on top of the standard rate.
Now let’s chat about the good part…Tax Deduction!
Like with all businesses, you will have some necessary expenses. This can be anything that is essential to keep your business up and running.
Examples of expenses:
Travel expenses – train tickets to get to events or meetings or mileage
Equipment – camera, lighting, laptop, editing software, phone
Website – hosting costs, domain, wifi, etc
Now you’re well equipped to declare yourself as self-employed – congratulations!
With the Influencersphere being relatively new there are always questions to be had, if you still feel a little confused you can contact HMRC directly and they can help with any questions. Comprehensive information is available on the official Gov.UK website and USA.Gov website.