The growing success of social media has made TikTok influencer careers profitable in the UK through partnerships with brands, product sponsorships, and merchandise sales. However, people who earn large amounts of money have specific tax-related obligations. TikTok influencers must learn their tax responsibilities to prevent tax penalties and unexpected bills from HMRC. In this article, we will discuss tax tips for TikTok influencers.
8 Essential Tax Tips for TikTok Influencers
You should report income in the same way that professional freelancers and business owners do their tax declarations. TikTok influencers active in the UK need to handle their taxes effectively to maintain proper HMRC compliance while avoiding penalties. The following eight tax tips for TikTok influencers will help you to handle your tax requirements properly while operating smoothly:
1. Do TikTok Influencers Have to Pay Taxes in the UK?
You fall into the self-employed category, according to HMRC, whenever you make money through TikTok or any other social media platform. You should report income in the same way that professional freelancers and business owners do their tax declarations.
2. Registering as Self-Employed
The requirement to register as self-employed through HMRC arises whenever you make more than £1,000 in annual income. The obligation to register with HMRC exists only when your yearly income exceeds £1,000, yet you do not need to register if your earnings fall below this amount. There are three main reasons to stay registered with HMRC:
- You need to present evidence of self-employment status to claim Tax-Free Childcare.
- You should make Class 2 National Insurance voluntary payments to safeguard your NI record.
3. Learning Your Tax Obligations
Being a TikTok influencer requires knowledge about UK tax responsibilities because failing to comply with HMRC rules might trigger penalties. All income that comes from sponsorships, brand deals, and merchandise sales requires proper reporting. Proper financial management depends on knowledge about tax guidelines for income tax and National Insurance Contributions to prevent unexpected tax liabilities.
Income Tax:
All income earned through influencing activities becomes taxable income according to the tax laws. The income tax rates operating in the UK for the tax year 2023/24 comprise:
- Tax-free personal allowance: £0 – £12,570
- 20% basic rate tax: £12,571 – £50,270
- 40% higher rate tax: £50,271 – £125,140
- 45% additional rate tax: Over £125,140
For deeper information about this matter, visit the government website:
National Insurance Contributions (NICs)
Self-employed TikTok influencers need to pay NICs when they operate their business online.
Class 2 NICs: These are fixed weekly payments that self-employed people must make to serve as contributions. The tax rate for the 2024-2025 year stands at £3.45 weekly.
Class 4 NICs: This calculation determines them through percentages of annual profit results. The tax year starting in 2024/25 will apply the following rates:
- Profits between £12,570 and £50,270: 6%
- Profits over £50,270: 2%
For deeper information about this matter, visit the government website:
4. Maintaining Record of Financial Activities
To report income accurately, you must show all your earnings related to influencer work together with every paid expense. The list of deductible expenses is shown below.:
- Equipment (cameras, microphones, lighting)
- The editing software and subscriptions
- Business operators need to pay the costs of their phone and internet services.
- Home office costs
- Expenses for business trips that happen when teams meet for collaborative projects or events
Having your receipts organised with digital records simplifies tax return processing and decreases your legal tax obligations.
5. VAT Considerations
Business influencers need to enroll in VAT registration when their yearly income surpasses £90,000. You must charge VAT for your provided services, including promotions and brand deals, while submitting VAT returns to HMRC.
6. Submitting a Self-Assessment Tax Return
Self-employed individuals must provide their Self-Assessment tax returns by 31st January every year for the past tax period. The deadline for tax return submission falls on January 31, 2025, for income received during the 2023/24 tax year spanning April 6, 2023, to April 5, 2024.
7. Setting Aside Money for Taxes
The combination of a dedicated savings account together with 20%-30% regular income contributions guarantees smooth tax bill payment before deadlines.
8. Seek Professional Help
The tax laws are challenging, so hiring professional accounting help will assist you:
- Identify tax deductions
- Complying with HMRC rules
- Minimise your tax liability legally
Final Thoughts
Being a TikTok influencer brings both money and enjoyment, but you need to get ready for tax obligations. Proper management, understanding of tax regulations, and tax tips for TikTok influencers help businesses achieve HMRC compliance without losing valuable income from their work. Obtain expert advice when you doubt any point of your tax duties so you can properly meet your legal obligations.
Disclaimer: This blog provides general information on tax tips for TikTok influencers in the UK. It is not intended as professional tax advice. The laws of taxation change from time to time, and individual cases differ from one another. For individualised information about taxes, speak to a certified tax expert or navigate to the official UK government web portal.
