Understanding the tax implications as a content creator can be complex, but we are here to help!
What is a content creator?
A content creator, sometimes known as a social media influencer, blogger, YouTuber or blogger is someone who makes a living through the creation of digital content. The content could be uploaded across different social media platforms such as YouTube, Instagram and TikTok or in more traditional formats such as blog posts.
Why is submitting tax returns different for content creators?
Calculating the tax liability for influencer earnings can be more complicated than for other types of income. Content creators frequently receive gifts and promotional products in exchange for endorsements. Sometimes, these items are sent without being requested, which makes it challenging to decide whether they are taxable income. Some of these gifts may have significant value such as luxury items or tech products.
When these items are provided instead of cash, HMRC treats this as “payments in kind,” which need to be declared and taxed . A qualified accountant will be able to help you understand the tax implications for your business. Use an accountancy recruitment agency such as https://talentfinance.com to assist you in finding an experienced, reliable accountant.
What tax will you have to pay?
Income Tax
There is a personal allowance of up to Ł12,570 in the UK, and anyone earning over that will need to pay income tax on their taxable income.
– Basic Rate: 20% on income between Ł12,571 and Ł50,270
– Higher Rate: 40% on income between Ł50,271 and Ł125,140
– Additional Rate: 45% on income over Ł125,140
National Insurance
You will also need to pay National Insurance.
– Class 2 is necessary if profits are above the Small Profits Threshold (Ł6,725 for 2023/2024).
– Class 4 is payable if profits exceed Ł12,570. It is charged at 9% on profits between Ł12,570 and Ł50,270, and 2% on profits over Ł50,270.
VAT
You will need to register and pay for VAT if your annual turnover exceeds the VAT threshold (Ł85,000 for 2023/2024). The standard rate is 20% but specific goods and services have reduced rates.
