Social media – it gets a lot of flack from people but it’s opened up an economy and created businesses for thousands if not millions of people. Never in the history of the planet has anyone with a smartphone, a passion and some ambition been able to create a personal brand and voice that gets more views, hits and likes than even the most entrenched of media outlets. (they hate it!)
What a time to be alive… All you YouTubers, Instagrammers, Tik Tokers and Tweeters are carving out a living by doing something that you love AND serving others in the process. Is there a better business?! I’m not sure there is…
Ok, so, you’ve gained a following, got an audience who loves you, developed a thick skin to those trolls (grrr) and are starting to see some income from your work as an influencer. Congratulations! few can do it, but you are on your way. Now you’re starting to make some money, you’ll want to keep as much of it as you can. Pay as little tax as possible and take advantage of any reliefs and incentives you can. So we put together 5 of our best tax-saving tips for social media influencers in the UK. (that you may not be aware of)
Keep records of everything you buy and spend
Buying a new camera? That’s tax-deductible.
New lights for your Instagram stories? Tax-deductible too.
How about a new iPhone just for those spontaneous moments? Yep, tax-deductible!
What does this really mean for you?
It means you pay less tax and you get to keep more of the money you earn.
Whether you are earning it through ad revenue, sponsorship or selling your own products, that income is taxable. The taxman wants his slice of the pie (unfortunately!)
But before the tax is applied you get to reduce that liability by claiming for any allowable business expense you made during that year.
That includes one-off expenses like laptops and camera gear. Right down to small regular expenses like Spotify for keeping an eye on your podcasts, or software for scheduling your social media posts.
Track it, log it, claim it.
Claim for hotels, trips abroad and days out
As an influencer, you are in a fairly unique position. To do your job, there are times when you will want to go to new places, stay in nice hotels or visit specific venues.
That means these trips are tax-deductible.
Yep, as long as you are doing it solely for business purposes you can claim the tax back on that expenditure.
Let’s look at a few examples:
You’re big on YouTube and want to make a new video series on a beach in Thailand. So you book a flight and a hotel and spend 5 days filming video content for your channel.
Instagram is your thing and you decide to take a train to London to produce some content on the London Eye.
Both of these would be a tax-deductible expense. As long as you are doing it solely for business purposes then you are entitled to make a claim. Pretty good huh?!
When you are starting to get followers, subs, likes and traction, you have to wear all the hats. Content planner, video editor, social media poster, even tea person!
But when you start to get some traction, that’s when you can look to hire people to help you out.
Say you hire a video editor on a cost per video basis, this free’s up your time to produce more content AND you can offset the cost of this help against your tax bill. Win-win!
Any help, whether it’s a person on your payroll or just someone from Fiverr is tax-deductible.
This one might be time sensitive so give us a call if you’re thinking of taking advantage of this relief.
But at the moment if you buy an electric car through your company you’ll get 100% relief on the purchase price.
This means if you buy say a new Tesla for say £70,000. Unlike petrol or diesel cars you can claim 100% of that expenditure against your profits in the first year.
So, let’s say you made £100,000 from sponsorship in a year. If you decided to buy that new Tesla and spend £70,000. You would only pay corporation tax on the £30,000 rather than £100,000. (£5,700 rather than £19,000)
Not bad at all…
Mileage & travel claims, lunches and training
A lot of people don’t know that you can make claims for any travel you do for business purposes. If you use your own car you can claim 45p per mile for the first 10,000 miles.
What does that mean in the real world?
Say you drove 100 miles round trip to a beach in the UK to film a few Tik Tok videos for your channel.
You can claim £45 in mileage expenses for that trip.
Then if during that trip you spent £40 on lunch, you can claim for that too.
Now let’s imagine there’s a social media conference at the NEC in Birmingham that you attend.
You can claim the cost of your ticket, your lunch, your travel and your hotel if you choose to stay over.
As an influencer, you can really start to take advantage of these reliefs and claims! That money is better in your pocket than the tax mans.
If you set yourself up as a company, open a business bank account and operate under that company structure then the rules of a limited company apply to you just as they do if you are running a supermarket. If you know the rules, you can play the game properly!
(BTW a limited company isn’t right for everyone, give us a call or send us an email for some free advice before you set up anything like that)
If you are a social media influencer and want to speak to an accountant who understands this business, has clients in the social media business, can help you save money and time dealing with all the tax headaches then give us a call or send us an email.
We’ll be happy to help.
Don’t forget to share and smash that like button if…. Na just kidding… I’ll leave that stuff up to you.
We’ll stick to what we know best… helping you keep as much of your money as possible 🙂