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Influencers - A Taxation Guide to Paid Posts, Endorsements and other Freebies

Updated: Sep 15, 2023

For social influencers crafting content on platforms like YouTube or Instagram, with the power to impact thousands or even millions, it's probable that brands will reach out, looking to capitalise on your popularity to market their products.

Influencer marketing takes shape in these ways:

  1. Paid posts.

  2. Opportunities for reviewing products.

  3. Featuring free products you discuss in your content.

Before determining potential taxation obligations for paid posts, endorsements, and free items, certain factors must be taken into account, explained below. As a general principle, ensure you maintain meticulous records of all income and related expenses, regardless of whether it's trading or non-trading income. This precaution helps in case of any inquiries from HMRC.

The factors include:

1. Trading Allowance: Each individual is granted a tax-free trading allowance of up to £1000, in addition to the personal allowance. Income below £1000 annually need not be reported to HMRC for tax, but it's important to maintain records.

2. Convertible Value: When given a product, consider whether it can be converted to money.

If not, no tax is owed.

3. Determining Trading vs. Non-Trading: As Social Influencer is a relatively new profession, distinguishing between trading and non-trading income can be unclear. Those creating content casually in their free time are often non-trading, exempting them from tax on free items.

Tax on Paid Posts: If your yearly income from paid posts exceeds the trading allowance, you must register for self-assessment and pay taxes based on your income level.

Tax for Product Reviews: When you receive products to review online with your audience, HMRC classifies this as a 'Barter Transaction'. Non-monetary trading income is generally taxable as part of regular income. HMRC realises and states in its Business Income Manual that not everything can be converted into cash meaning some items, like a free holiday stay, might not be taxable. Yet, valuable gifts are taxable, and agreements with sending companies should be clear on terms and value.

Tax on Free Gifts: Gifts with obligations like advertising are taxable once accepted. Purely gracious gifts are non-taxable.

Social media influencing is a constantly changing field. At KM Accountancy, we take pride in our understanding of this industry. We work hard to keep up with rules, regulations, and best practices. We know that unclear and open-to-interpretation rules can make it tough to work confidently. Most people in this industry are creative professionals, not tax experts.

While this may seem daunting, solid financial advice and strategic tax planning can mitigate the impact of taxable gifts.

Want help with taxation for paid posts, endorsements and freebies?

Reach out to our experts. We'll clarify what's taxable and what's not. Our advice will help you regain confidence in your influencing work.

For more information, contact or 0141 266 0563.


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