The ‘influencer phenomenon’ began around 2009 with YouTube but quickly spread to other platforms, including Instagram. Before that, this type of career didn’t exist, but it’s become a viable business model for people looking to become self-employed.
As accountants for social influencers, we understand it can be difficult to focus on growing a business when you also have to consider things like VAT, self-assessment and, if you have employees, payroll. This is why we’re on hand to help. We take the stress out of managing your accounts and ensure that your business is as tax efficient as possible.
Take a look at how to become a self-employed influencer and what you get when you choose Gorilla Accounting as your partner.
The Pros and Cons of Being a Social Influencer
There are many reasons to become an influencer so, if you’re on the fence about this career choice, being aware of its benefits might help you reach a decision.
For example, you can get paid to promote products and services. You are likely to be able to work from anywhere in the world, so you don’t have to work from within the same four walls all the time and can get out of the ‘office grind’ if a 9-to-5 isn’t your thing.
You can also help make a difference when you have hundreds, thousands, or even millions of followers, so this is something to keep in mind. Another reason why you should take the leap is that you’ll be doing what you love – job satisfaction can, sometimes, be overlooked, but seeing as we spend most hours of a day working, might as well do what you’re passionate about!
Of course, there’s always a flipside. For example, being an influencer requires you to spend time promoting your brand before you can advertise other people’s, and it can take some time to build followers (especially engaged ones).
You may not be raking in the money initially either; many influencers start earning very little while they grow their business and can end up accepting free work or low-paid gigs in the meantime. You must also stay on top of the latest trends to stay relevant.
Do You Know When to Start a Business?
One of the first things you should consider is the right time to start your venture. When should you turn your passion or hobby into a business? Most influencers begin by simply posting content and building an audience but, as soon as you start to sell or promote services and products – or monetise your platform in any other way – you’ve created a business.
And, while it’s exciting to be able to make money from doing what you love, it’s also important to keep in mind that you have to pay taxes. There are several legal obligations and responsibilities that you must comply with, but we can help with that every step of the way.
We can handle everything, from company formation to assistance with HMRC records checks and corporation tax. So, whether you’re just starting out or have been trading for a while, Gorilla Accounting can be your accounting partner.
Figure Out Your Audience
Starting an influencer business can be simple, but there are many things to consider as well. For instance, it’s crucial that you understand who your audience is and how to reach it, which is how you’ll grow a follower list. To achieve this, consider the type of work you’re going to do.
Do you want to specialise in travelling? Are you a gamer? Are you passionate about makeup? Do you love reading and want to start a blog or a YouTube review channel?
Someone interested in learning more about makeup will likely prefer to watch tutorial videos or get product reviews, so platforms like YouTube and Instagram may be the right option for you. On the other hand, if you want to build an audience of avid gaming fans to watch you play or interact with, platforms like Twitch can be a good starting point.
You must understand who you’re looking to influence, what they like, the type of content they usually engage with, and where they can be found, etc. Once you focus on this, you’ll find it easier to build your brand too.
How You Plan on Making Money
A monetisation strategy is essential for any business owner, including influencers. As mentioned, you must figure out how you’re going to make a living before you start your venture, so take a look at some income avenues that may suit your business:
- Affiliate marketing – in which you promote someone else’s products and services and receive a percentage from each sale.
- Ads – you can set up ads on your website or blog and make money every time someone clicks on them.
- Sell your own products – this can be anything, from ebooks to courses.
- Gifts – you can also accept gifts as payment; for example, you can receive products in exchange for advertising them.
- Sponsored posts – companies can pay you to publish certain posts, but they usually control that content, so you may not have a lot of say in what goes in them.
- Merchandise – influencers, including YouTubers, often start selling branded merchandise to their audience and followers (things like t-shirts and mugs), so this is another possible source of revenue.
When it comes to monetising your influencer business, the sky’s the limit. Check out what your competitors are doing and what your audience expects of you, then create a game plan to help you decide what to do.
Sole Trader or Limited Company?
Another thing to take into account is that you need to choose a business structure when you decide to become a business. This often means opting for sole trading or setting up a company and becoming a director. Each option has its pros and cons, so consider them before making your decision.
Sole traders, for example, may find the process of starting a business more straightforward; you simply need to register as self-employed with HMRC, get your Unique Taxpayer Reference number and that’s it – you pay your taxes by submitting a self-assessment tax return. However, despite the simplistic nature of this structure compared to limited companies, there’s no denying that submitting your returns can also be a source of stress.
As self-assessment accountants, we’ll save you time and money, and give you peace of mind of knowing that your paperwork and taxes are sorted by an expert accountant. This way, you don’t have to worry about making a mistake in your returns or spending time trying to understand how to fill everything out properly.
Still, you’ll also want to remember that, as a sole trader, you’re not seen as a separate legal entity from your business, which means that you’re personally responsible for any of your venture’s debts.
The same isn’t true of limited companies, since you get limited liability with this business structure – and your personal finances are not impacted by your company’s. This can also be the most tax-efficient way of running your business, depending on your annual turnover.
However, there is a lot more admin involved when you’re the director of a company, and you also need to pay corporation tax and consider IR35, which you don’t need to worry about as a sole trader. But being a limited company can give you more credibility and help you find gigs or contracts, which are great reasons to consider this path.
In addition, you get complete control of your business, including its name, and can claim company expenses.
As both sole trader accountants and limited company accountants, we’ve got years of experience helping self-employed individuals live their dreams, so let us help you start or grow your business. Call us on 0330 107 9676 to learn more and to speak to one of our specialist accountants. We’ll also help you to make the decision that works best with your business.
How Do You Pay Tax as an Influencer?
It doesn’t matter if you’re working part-time or full-time as a social media influencer; you must still register as self-employed and pay HMRC exactly what you owe based on how much you’ve earned in a given tax year.
You pay taxes and National Insurance depending on your business structure, and you’re entitled to a personal allowance of £12,570 for the 2021/22 period, which means you don’t have to pay income tax if your total income from all sources falls below this amount. If you’re already employed and have started a side gig as an influencer, you may have already ‘used’ your personal allowance.
You can also get an allowance of up to £1,000 tax-free in addition, so you don’t have to declare any sales or transactions below this value. Still, as a business owner, you’ll want to record everything, so make sure that you track everything you spend or earn, no matter how insignificant it seems.
You can also claim expenses when you become a business so, when it’s time to pay taxes, consider things like the equipment you use for your job (such as cameras and computers), whether you have to travel, your marketing fees, your website costs, and so on.
What Gorilla Accounting Can Do for You
We’re experts at what we do. We work with individuals from many different sectors, from IT and medicine to architecture and social media – this means we’re always on top of the latest news and legislation of your industry. We also supply you with FreeAgent bookkeeping software so you can keep track of your transactions, expenses and invoices. This tool is Making Tax Digital-compliant as well.
At Gorilla Accounting, we can help you with many things, including:
- Incorporation
- Corporation tax returns
- HMRC records checks
- Dividends
- Employment status references
- Deadline reminders
- Companies House Confirmation Statements
We can even provide you with a registered office address for only £10 + VAT per month! When you’re self-employed, you must also think about the future as early as possible, so we also offer financial planning services you can benefit from.
There are many other perks from being our client, so contact us today to learn more about our services and the benefits of having us as your accountant.
