The rise of social media has allowed many people to start earning considerable income online through popular platforms such as YouTube, Facebook, Twitter andInstagram.
In fact, many people have made, and continue to make, large amounts of recurring revenue from their social media accounts. This is great for those participating and generating cash, but it also means that this revenue stream needs to be accounted for to adhere to UK law, which is why Gorilla Accounting provides clever and effective accounting for social media influencers.
What is a Social Media Influencer?
Individuals (and sometimes couples and groups) can rise to internet fame through social blogging and sharing of useful content across different social media platforms to their wide network of users. Large audiences on a particular platform for a popular channel or blog can attract advertisers, which in turn produces an income for social media content creators. Particularly popular individuals can help drive traffic to specific brands and products and they can exert a heavy influence on the choices of their fans leading to the term ‘social media influencer’.
Is the income from social media advertising taxable?
Yes and no. This depends on your personal circumstances. As with any personal income, there is a tax-free allowance, however, this allowance is for all of your personal income, so if social media revenue is in addition to another full or part time job then it may exceed this threshold. You would then pay income tax on your earnings dependent on your personal circumstances and it is advised that you contact an expert who specialises in accounting for social media influencers, such as Gorilla Accounting.
Should I set up a limited company for my social media earnings?
This is another yes and no answer, as it depends on individual circumstance. If you are unsure, however, you should contact Gorilla Accounting who specialise in accounting for social media influencers.
What are the benefits of a limited company?
There are a number of reasons why a limited company might benefit you and your finances if you generate revenue from social media. Although you may run your social media account(s) for fun, it could be classified as a business in its own right, so firstly, a limited company would help keep your personal income (if you have income coming from elsewhere) separate to the social media ‘business’ income. This could help reduce your taxable income and help you maximise your expenses allowances for costs relating to your social media business.
Secondly, this separation of your social media work to your personal income would also separate your personal wealth from that of the business entity in which you would run your social media work. This could reduce your liability in the event of your social media business losing money.
Thirdly, a limited company could help to make your financial affairs more efficient through the use of a large variety of income options when using a company such as dividends and matched pension contributions.
What are the downsides of a limited company?
There are also some circumstances in which a limited company may not be the best available option but there will likely be a number of strategies that can be implemented to ensure you are fully utilising your allowances and maximising your income. It is advised that you seek an assessment of your finances with a professional accountant who is knowledgeable in this area.
What are the next steps to potentially improving my income?
Personal and business finances can be complex. If you are earning income from social media activities then it is advisable to speak to a professional who will be able to assess your personal situation and devise a tailored plan to help you become financially efficient.
How can a specialist social media influencer accountant help?
An accountancy firm like Gorilla Accountancy that have a team of experts to help the likes of social media influencers will be able to help you file your tax returns and other necessary financials associated with your personal situation, whether you are working freelance or through a limited company. This can help to release you from the hassle accompanying your financial obligations. In particular, specialist accounting for social media influencer companies can also help determine the most suitable structure for your work to ensure you are maximising your earnings and review this on a regular basis, which could save you financially.
Here at Gorilla, we understand your unique needs in this relatively new and exciting sector, so if you want advice from a fresh-faced team of experts that can help maximise your income then contact us to find out more about our accounting for social media influencers service on 0330 024 0406.
