The short answer is yes — influencers in the UK must pay tax on their earnings.
Whether you earn through Instagram sponsorships, YouTube ads, TikTok collaborations, affiliate marketing, or brand partnerships, HMRC treats influencer income as taxable business income.
Here’s a technically accurate breakdown.
1. How Does HMRC Classify Influencers?
HM Revenue and Customs does not have a separate tax category for “influencers.”
Instead, you are usually treated as either:
- Self-employed (sole trader)
- Director/shareholder of a limited company
Your tax treatment depends on your business structure.
2. What Income Is Taxable?
If you receive value because of your online activity, it is generally taxable.
Taxable Income Includes:
- Sponsored posts and brand deals
- Affiliate commissions
- YouTube or platform ad revenue
- Appearance fees
- Merchandise sales
- Event hosting income
- Digital product sales
- Brand retainers
- Paid subscriptions
What About Freebies & Gifted Products?
This is where many influencers make mistakes.
If you receive goods or services in exchange for promotion or under a contractual obligation, the market value is normally treated as taxable income.
Example:
- A brand sends you a phone worth £1,000.
- You are required to post about it.
- £1,000 is taxable income.
However:
- If a product is genuinely unsolicited
- And there is no obligation to promote it
- And no commercial agreement exists
It may not be taxable.
Proper documentation is essential.
3. Sole Trader Tax Position
If you operate as a sole trader:
You must:
- Register for Self Assessment by 5 October following the end of the tax year you started trading
- Submit a tax return by 31 January
- Pay Income Tax and National Insurance
National Insurance (Current Rules)
From April 2024:
- Class 2 NIC is no longer payable for most self-employed individuals above the Small Profits Threshold (entitlement remains)
- Class 4 NIC still applies on profits above the lower profits limit
Income tax is charged on profits after allowable expenses.
4. Limited Company Structure
Many higher-earning influencers operate via a limited company.
In this case:
- The company pays Corporation Tax on its profits
- The influencer can pay themselves via salary and/or dividends
- Dividends are taxed separately on the individual
This structure can provide tax planning opportunities but increases compliance obligations.
5. What Expenses Can Influencers Claim?
Expenses must be “wholly and exclusively” for business purposes.
Common allowable expenses include:
- Camera, lighting, microphones
- Editing software subscriptions
- Website hosting
- Marketing tools
- Travel to shoots or events
- Professional photography
- Accountant fees
- Use of home (proportionate claim)
Dual-purpose expenses (e.g., clothing suitable for everyday wear) are usually not allowable.
6. VAT — When Must Influencers Register?
The VAT registration threshold is £90,000 (from 1 April 2024).
If your taxable turnover exceeds this threshold in any rolling 12-month period, you must register for VAT.
Important considerations:
UK Clients
Standard UK VAT rules apply (usually 20%).
Overseas Business Clients
Many influencer services supplied to overseas businesses fall under B2B place of supply rules, meaning:
- VAT may not be charged
- Reverse charge may apply in the client’s country
This is a key area where professional advice is recommended.
7. International Income
If you earn income from:
- US brands
- EU companies
- International affiliate networks
You are still taxable in the UK if you are UK tax resident.
Double taxation agreements may apply if foreign tax is withheld.
8. PAYE — When Does It Apply?
Influencers are rarely employees.
However, PAYE may apply if:
- You have a formal employment contract
- You are under employer control
- You receive a fixed salary
Most influencer arrangements are self-employment.
9. Common HMRC Risk Areas
HMRC has increased scrutiny of the creator economy.
Common compliance issues include:
- Failure to declare all income
- Not valuing gifted products correctly
- Claiming personal clothing as business expenses
- Ignoring VAT obligations
- Not declaring overseas income
Poor record-keeping significantly increases enquiry risk.
10. Key Deadlines
For the 2025/26 tax year:
- Register for Self Assessment: by 5 October 2026
- File tax return: by 31 January 2027
- Pay tax due: by 31 January 2027
- Payments on account may also apply
Final Verdict
Yes. Influencers are treated as business operators under UK tax law.
If you earn income from your online presence, it is taxable. The complexity increases when:
- You receive non-cash benefits
- You exceed the VAT threshold
- You work internationally
- You operate via a limited company
Proper structuring and compliance can reduce risk and improve tax efficiency.
If you’re an influencer unsure about your tax position, professional advice can save far more than it costs.
Disclaimer: This article is intended for general information purposes only and does not constitute tax, legal, or financial advice. Tax legislation and HMRC guidance may change, and the application of tax rules depends on individual circumstances.
While every effort has been made to ensure accuracy at the time of publication, no responsibility is accepted for any loss arising from reliance on the information contained herein. Readers should seek professional advice tailored to their specific situation before taking any action.