Social Media artists – navigating the complex tax terrain?

You're a social media artist. Your world is virtual. Your followers are many. But what about the taxman? He's as real as they come. In this article, we'll unravel the unique tax landscape that you and your fellow social media influencers traverse. Let's make sure you're well-prepared when the taxman comes knocking.

Understanding the Tax Basics

So, you're earning an income as a social media artist? Congratulations! Whether it's your full-time job or a side hustle, you've found a great way to earn a living and to make a difference while having fun along the way. But just a quick word of warning – you are, of course,  regardless of the platforms you populate, in the eyes of the law, a business owner. That's right  - you're not just a starlet on the 'Gram or a guru on YouTube. You're running a business. This shift in perspective is vital to grasping your tax obligations.

Self-Employment and National Insurance
Unlike salaried workers who have taxes deducted through PAYE, you're effectively both employer and employee. This means you're responsible for paying both Class 2 and Class 4 National Insurance contributions.

 
The Value of Gifts and Freebies
An overflowing postbox full of gifts may well be a common part of your role as a social media influencer. This might feel like a never-ending birthday, but do remember – that's not the taxman's view. He'll see things differently – through less generously tinted spectacles. You may well have to pay tax on the value of these 'free' goodies.

 
Claiming Business Expenses
Did you buy a new outfit for a video shoot? Have you been jetting off to stylish locations for brand collaborations? The line between your personal and professional life as an influencer is often blurred, but you may well be able to claim against such business expenses.

 
Dealing with International Tax
What about your followers? Do they span the globe? Then your income sources probably do too. This poses a complex situation for taxes. Remember - different countries, different tax rules.

VAT – do you have to pay?
Does your taxable income breach the VAT threshold? This currently sits at £85,000. If the answer is 'yes', then you'll need to register for VAT and pay your share quarterly.

 
Importance of Record Keeping
In the world of tax for social media influencers and artists, solid record-keeping is your best ally. Keeping a handle on all income sources and expenses can save you a ton of headaches later. Your accountant will help with this.

 
Employing Family Members
Do your family members make regular appearances in your videos or shoots? That'll be good news. This can lead legitimately to tax benefits. It's worth checking out.

Maximising your Tax Deductions
You can lighten your tax burden perfectly legally and deduct all kinds of business expenses. That’s another reason to talk over your situation with your accountant.

Preparing for Retirement
It's never too early to think about retirement, especially when it offers tax benefits. Contributing to a pension scheme can help you to

(a) reduce your taxable income.
(b) sleep at night, secure in the knowledge that, at the end of your working life, you can look forward to the kind of lifestyle you've dreamed of.

Seeking Professional Help

Being a social media artist means venturing into unfamiliar tax territory. Navigating the tax maze can be a daunting task. However, with the right knowledge and professional guidance, you will not only survive but thrive. Professional advice might be the lifeline you need.

As a social media artist who earns an income, you’re like any other business. Don’t make the mistake of thinking that, just because you set out on this path as a hobby, you’re not subject to tax obligations as much as any other business.

But equally, remember that you can also reduce your tax obligations by claiming for a raft of business expenses. But navigating the tax system can be tricky, especially with so many rules and regulations to keep track of.

So, talk to an accountant who understands the world of social media. That's where Liondaris & Co Accountants can help. Our expert team will guide you through the complex world of business expenses and ensure you're paying the tax that you should whilst making the most of your tax deductions.

Why not give us a call today and see how we can help you maximise your savings and grow your social media business?

___________________________________________________

Tax advice for social media influencers FAQs  

1. Do social media influencers have to pay taxes on all types of income?
Yes, all types of income, whether cash or in-kind, are subject to tax.

2. Can influencers claim expenses for personal items used in their work?
Often, yes. If these items are used for business purposes, they may qualify as business expenses.
 

3. What if an influencer works with international brands?
The influencer may need to comply with international tax laws and declare this income in their UK tax return.
 

4. Do influencers need to register for VAT?
If their annual taxable turnover exceeds the VAT threshold  - currently £85,000  - they will need to register.
 

5. What kind of deductions can social media influencers make?
Influencers can deduct business expenses, such as travel, equipment, and sometimes even part of their rent or mortgage.