Social media influencer accountants

The world of social media and its many different strains and algorithms is enough to boggle even the most clued up of minds. What goes viral next can never be predicted, nor can you ever determine an influencer’s popularity until the views start rolling in.

According to statistics, 57% of Gen-Z (those born between 1997 and 2012) would want to become a social media influencer should the opportunity arise. With that in mind, it looks as though that industry will continue to grow year on year.

Sometimes, the latest social media sensation doesn’t even come from an “influencer”, just someone sharing their day-to-day life which suddenly becomes a phenomenon – and in doing so, garners a huge amount of attention, resulting in generating an increase in income.

One good example of this is the recent success of Spudman, aka Ben Newman. Running a trailer in Tamworth town centre selling jacket potatoes with various toppings, Ben started sharing his days on TikTok whilst wearing a GoPro and has since built a following of 2 million people.

Customers are now visiting from across the globe and it’s no longer unusual to see huge queues as people wait for their favourite spud. He’s reported to have even sold 1,500 potatoes in a single day!

Now an internet sensation, Mr Newman joined TikTok to promote his business in the wake of the pandemic and has since been praised for using his platform to promote the town and other local businesses.

With hundreds of people taking road trips to get a jacket potato from Spudman himself, he’s sparked a viral trend of people showing how they make their own jacket potatoes on TikTok and people from other nationalities are suddenly discovering the good old “British spud”. Practically overnight, he’s become the latest influencer on the app.

Already running a successful business, Spudman’s online platform has now made his income grow to a whole new level – he should now be monetising videos and taking advantage of any sponsorship opportunities. If you find yourself in a similar position, you’re probably wondering if you need an accountant as an influencer to make sure everything is in check…

Social media accountants and making money online

Accounting for social media influencers is a very specialist area that not many accountants seem to be clued up on, despite the rise of online talent growing at a rapid rate over the last 10 years. An accountant for influencers needs to keep on top of the different areas in which social media influencers and content creators can earn money.

Making money online comes in all sorts of guises, which is often unclear when you first start out creating content. There are so many different ways to make money on social media, with different opportunities presenting themselves based on your engagement and followers depending on the content that you make.

You can earn an income through monetising videos or posts, by working with brands to promote their products or services and through affiliates or subscriptions. All of these opportunities allow you to make an income, whether solely through these ways or alongside your “day job”.

If you do social media as a “side hustle”, you can earn £1,000 per tax year before having to worry about paying any tax on it. This is called the “trading allowance”.

However, in the world of social media, you can probably earn £1,000 quite quickly once you start to rack up the followers and the views. If you find yourself earning more than £1,000 in a tax year through social media, you will need to ensure that any taxable income and expenses are tracked.

Keeping track of the different income streams through social media can be difficult, especially if this is brand new territory for you. It is just as complicated as running your own business, and many social media influencers will set up a limited company for any bookkeeping to go through. At this stage, you might find it beneficial to appoint an influencer tax accountant.

Social media influencer accountants can help you track your incomings and outgoings and ensure you’re HMRC compliant and paying the correct tax for your earnings. When it comes to take home pay, you need to be making sure you’re submitting a self-assessment and setting aside money to pay your tax bill.

A guide to tax for social media influencers

Social media influencers need specialist guidance if they are to understand what they need to report to HMRC. The rise of social media platforms such as YouTube, Tik Tok and Instagram has bred an army of influencers, and the majority are earning an income from the content they’re streaming.

Influencers come in all shapes and sizes, with some posting for pleasure and others making it their full-time career. What’s good to remember is that influencers are not an exception to any normal tax payer – their stream of income may be slightly unconventional, but the rules from HMRC still apply.

What are the different forms of income?

Calculating an influencer’s taxable income can be difficult. As we’ve mentioned, their income comes from multiple and varied sources including:

  • Creating posts online across a variety of platforms and monetising them
  • Working with brands to become an ambassador and promote their products
  • Creating content on behalf of businesses and brands
  • Selling through TikTok shop
  • Sharing affiliate links to products
  • Setting up subscriptions to content
  • Meeting fans and selling tickets
  • Selling merchandise
  • Appearing on or hosting podcasts or livestreams

There are multiple ways to earn money and the amounts of income can vary based on how many followers the influencer has. Whichever form of trading they use, it is necessary to understand the tax filing and reporting obligations.

But there are some grey areas, which HMRC and the Advertising Standards Agency do keep a very close eye on.

A lot of the time, this includes issues arising from influencers posting about free products sent from businesses that are undisclosed as any form of ‘ad’. If influencers are being ‘gifted’ products, services or experiences to post on social media about, how is this valued? Should it be a taxable income? And then if an influencer doesn’t like the product, are they still obliged to post about it in a positive light? The guidelines around this type of ‘income’ are a grey area.

HMRC are hot on the tails of influencers though, as more and more individuals manage to earn money online. Many in the last year have been approached to certify their affairs through the Digital Disclosure Service. However, HMRC needs to produce clear, concise and accessible rules and guidance for online influencers, to ensure tax compliance.

Influencer Accounting with Gorilla

The world of social media content creation is growing, and these individuals need to understand their tax reporting and filing obligations. If you’re looking for an influencer accountant who can help you with your finances, Gorilla Accounting can help.

There are not many designated accountants for social media influencers out there – especially those with the amount of knowledge and experience you will get from an accountant at Gorilla Accounting. For one fixed monthly fee, Gorilla Accounting can handle ongoing tax management responsibilities that come with being a successful social media influencer.

Included in our service is full access to FreeAgent. As a social media creator, you’ll be used to having everything in one place on your smartphone. When running your business through your phone, it makes sense for you to manage your finances that way too with a cloud-based accountancy platform.

FreeAgent can be accessed anywhere, at any time if you are online and is a place to send and receive invoices, log expenses, check your cash flow and have everything in one place for your tax return. Your accountant also has access to this, so you can work together seamlessly.

If you’re looking for an accountant that understands the industry, with Gorilla you’ll have a direct contact number and email address to your own accountant. Under our Client Service Guarantee, if you contact your accountant before 3pm, they will get back in touch with you that very same day. You can concentrate on your day-to-day knowing that any questions or queries will be addressed ASAP.

Looking to get the ball rolling? Click here to fill in our online form and one of our accountants will get back to you to discuss your requirements!