HMRC has begun contacting influencers and online traders to request that they complete ‘a certificate of tax position’, targeting individuals running blogs, content creators, owners of social media accounts posting sponsored content, and anyone bidding for work online.
The detailed letters inform recipients that HMRC is aware of their earnings from a digital platform and that some or all of these earnings have not been declared. Those contacted have been asked to check their tax returns and confirm that all income has been reported, with earnings above the tax-free personal allowance of £12,570 particularly crucial.
Recent rule changes mean that online platforms now supply sales data to the tax office, giving HMRC increased visibility of individual earnings. Coupling this information with its strong data analysis technology, HMRC’s latest nudge letters – which give recipients 30 days to respond – are said to state:
“We have information that shows you’ve earned money (income) from creating content on digital platforms. We also have information that shows that you have not told us about some or all of this income. This means you may owe tax.”
Should you receive such a letter, or be operating as an influencer, content creator or otherwise, we strongly recommend speaking with a reputable accountant with experience in this specialist sector.
Since the pandemic, we’ve seen a big rise in gig economy workers and people making a living online, but for many, dealing with tax affairs is unchartered territory and it can be both confusing and daunting.
The letters are designed to create a sense of urgency, but a considered approach is always best, and we’re here to guide you through the process.
Online influencers can utilise tax planning activities to maximise earnings and ensure they’re operating in the most tax efficient way both now and in the future, but sadly, many don’t have a plan in place.
With extensive expertise supporting influencers across all platforms, including YouTube, Instagram, TikTok and Facebook, we help individuals, families and teams transform hobbies into businesses. See how we can help by visiting our dedicated social media and influencer hub: www.championgroup.co.uk/sectors/social-media-influencers/
For additional advice and support, contact our group partner, David Herd, at david.herd@championgroup.co.uk or call 0161 703 2500.
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