On the 16th March Chancellor Jeremy Hunt delivered the Spring Budget which set out the…
The power of social media
I’d like to consider myself a frequent user in the tech world, and although not as savvy as some to make a living on the various platforms, I do use them for social, spending and VALIDATING companies. I find myself seeking out professional help, and using their Instagram, Twitter, Linked in handles over their websites. I feel that this tells me more about the brand, their clients and reputation.
So, with the power that social media has over purchasers and spending, it would only take some time before the numerous channels caught the eyes of HMRC.
Who are HMRC looking at?
Content creators, influencers and even gamers, earning income or ‘side-line’ incomes from social platforms have fallen within the watchful eye of the tax man for undeclared income and potential capital gains tax liabilities.
“A growing number of individuals now make a living by promoting brands’ products online and selling items on e-commerce platforms. In some cases, whether they have a tax liability may not be immediately clear. Some influencers who receive payment in the form of clothes, holidays or beauty products for promoting a brand might not realise they may need to pay tax on these goods and services” TelegraphThe Telegraph
It’s not something that many may consider, earning an income from selling or promoting brands. However, any earnings above the £1,000 annual trading allowance needs to be declared via self-assessment to HMRC. Even if you don’t explicitly receive money, and instead just receive a gift of clothing, or products, you will need to value these gifts and declare them above the £1,000.
You may also need to consider capital gains tax. If your in the business of selling on items, used or new and generating a profit of over £6,000 (as of April 2023) will also need to declare these profits to HMRC.
HMRC have written to individuals with large followers or active in the promotional selling market to give them the opportunity to declare current and previous earnings via their ‘nudge letters’. It would be advisable that all income is declared whether you’ve been approached or not to avoid penalties on late or undeclared income.
If you are earning an income from these types of sources, it is important that you speak to an adviser or tax specialist for support on disclosers.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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