What Can Influencers Claim On Tax?

Becoming self-employed as an influencer comes with some perks, one of which is a steady income stream. However, managing this income can be difficult, especially with a workload, and it can be tricky to understand what influencers can claim on tax.

In today’s blog, we will take a look at how tax deductions for influencers work, what is classed as a business expense and how we can help to manage your finances as an influencer at DH Business Support.

How Much Tax Should Influencers Pay?

Just like any income, influencers are entitled to a tax-free allowance of £12,570. Any income made after this is eligible to be taxed.

Whether you receive payments in cash by offering gifted products, goods, or services, as an influencer, it all still counts towards your tax payments.

What Are The Tax Deductions for Influencers?

There are many different types of expenses that you can deduct from your tax bill, these include:

Filming Equipment

You can add the costs of filming equipment such as phones, cameras, microphones etc to your tax bill. As long as they are used for your business or benefit your business in some way.

Non-Gifted Products That You Purchased to Review

Any gifts that you have purchased yourself to review can be claimed back on your tax. They are seen as a part of growing and maintaining your business.

Online Training Courses

If you take part in any paid training courses, you can claim those back on your taxes, ensuring that they benefit your business in some way.

Work-Related Travel Expenses

You can claim back 45p per mile when travelling for your business. However, you must be able to prove the amount you travelled and that it was for your business.

Software and Subscriptions

Any software or subscriptions that you may need to use as an influencer such as editing apps, graphic design or social media scheduling tools. As long as they are used for your business, they can be added.

Influencer Accounting Costs

If you utilise the help of an influencer accountant to help you track your finances and work out your taxes, you can add these costs to your tax bill.

You can add anything to your tax bill that accounts for your business costs. If you are unsure, you can check the HMRC guidelines for what they accept.

How Do Tax Deductions Work?

As an influencer, you pay tax on your yearly earnings, but you can deduct your business expenses from the total.

For example, if your annual turnover is £50,000 and you claim £10,000 in business expenses, the remaining £40,000 will be taxable income, and you will owe the relevant amount, which in this case would be 20%.

You must keep a record throughout the year of everything that you spend on your business by keeping receipts. HMRC will need to see these records when it is time for your tax return.

The tax that you owe as an influencer is structured in bands. The amount that you earn each year depends on how much tax you are expected to pay.

Do I Need Proof of My Expenses?

When you submit your tax return, you don’t need to submit your proof of expenses with it. However, it is non-negotiable that you keep a record of all of the costs that you deduct from your tax so that you can show them to HMRC when asked.

Your records must be as accurate as possible to ensure you remain compliant.

Can I Claim Back Expenses For Working From Home as an Influencer?

Yes! You can claim back working from home expenses as an influencer! If you work from home as an influencer, there are a few costs you can claim back on your tax return at the end of the business year. These include:

• Rent – If you have a room in your home dedicated to online activities that you don’t use for anything else.
• Wifi – Internet access is needed to upload your content and therefore contributes towards your tax deductions.
• Furniture – Desk chairs and desks or any other furniture that you only use for your business.

What Happens If I Claim an Expense Incorrectly?

If HMRC notices any minor errors in your tax return, they may ask to see your records. You may owe more tax or may be eligible for a tax refund if you have overpaid. If you notice that you have made an error during your tax return you should contact HMRC immediately so that the error can be rectified.

If you submit your tax return and realise you have made a mistake, you have to wait 72 hours before you can go in and edit your return. You must then correct your tax return within 12 months.

If you don’t alert the HMRC that you have made a mistake, you are at risk of receiving a penalty.

This is one of the main reasons why you must utilise the help of an influencer accountant to ensure that your tax is always filed correctly.

Manage Your Accounts With The Help of DH Business Support

Here at DH Business Support, we offer an excellent and trusted influencer accounting service. Our team of specialists in influencing accounting is here to help you every step of the way on your journey.

Our influencing accounting service helps online content creators get the most out of their online earnings. We understand that you work hard for your money and helping you to make the most out of being self-employed whilst also paying your taxes correctly is important to us.

Our team respects that you are likely to lead a busy lifestyle, both on and offline and therefore we are here to help you reach your financial goals, so you can put more time into what you do best- content creation.

Save the stress and worry of filing incorrect tax returns and let us help you today!

Not sure if influencing accounting is right for you? Get in touch with our team who will be more than happy to answer any questions you may have.