Whether you create content for fun or as a full-time career, it’s essential to understand your tax obligations to stay compliant and avoid unexpected fines.
In this blog we explore the tax considerations for content creators who monetise their content, whether you’re starting out as a hobbyist or running a growing business. We’ll break down the types of taxes you may need to pay now or in the future as your earnings expand.
What is a content creator?
A content creator is someone who produces digital content, such as videos, blog posts, or podcasts, and shares it online with an audience. The term ‘content creation’ covers a wide range of activities, so this might include a YouTuber who uploads new recipe videos every Friday, or a TikTok creator who regularly posts original comedy content.
How do content creators generate income?
Content creators can monetise their platforms in a variety of ways, including:
- Brand sponsorships
- Advertising
- Affiliate marketing (which is a popular method right now, especially through TikTok Shop)
- Passive income earned through paid subscriptions (although it might not be that passive, given the time you’ll spend creating content in exchange!
Creators can also leverage their influence and audience to launch their own businesses, such as coaching programs, digital marketing courses, or selling products relating to their personal brand. You could even launch
Will I need to pay tax on any earnings as a content creator?
Paying tax as a content creator depends on how much you earn from it, and how you earn it. Something called the trading allowance means you can earn up to a maximum total of £1,000 from ‘miscellaneous’ income in a single tax year (from 6th April until 5th April the follow year) without needing to pay tax on it, or even notify HMRC. This threshold increases to £3,000 for the 2027/28 tax year onwards.
If you go above the £1,000 trading allowance then you’ll need to start declaring your income. At this point HMRC will need to know if your content earnings are ‘trading’ income, or ‘miscellaneous’.
Why does it matter if I’m ‘trading’ or earning ‘miscellaneous’ income?
This is very important in lots of ways. To give you a very broad example, someone who is ‘trading’ might need to pay National Insurance on their earnings, but might also be able to offset any business expenses against their tax bill. Someone earning miscellaneous income will only pay income tax – not National Insurance.
How do I know if I’m trading or not trading?
This is where it gets tricky, because for many content creators it starts out as a hobby.
For example
You start out with ad hoc videos of restaurants you’d recommend going to whilst on holiday, posting them on TikTok and YouTube to fewer than 100 followers. There’s no strategy behind it, or intent to make a profit – even if you do make the occasional small sum of money. You’re likely not classed as a trader.
A year down the line, you’ve found an audience and have 10,000 followers. You’re making money from your videos with a solid marketing strategy that involves things like ads, affiliate marketing, and brand deal opportunities. In this instance, HMRC are likely to consider you to be trading.
It’s useful to consider your earnings as a content creator against what HMRC call ‘the badges of trade’:
- Are you intending to make a profit?
- Are you actively seeking out brand deals, utilising affiliate marketing, or monetising your content via ads or subscriptions?
- Do you follow a content plan, and post regularly? (Bonus points if you use scheduling or editing software!)
- Are you receiving income or free gifts in exchange for promotion? (The latter is known as payments in kind, which all influencers should be aware of)
What taxes do content creators pay?
The type of taxes you might need to pay as a content creator depends on what sort of legal structure you decide to register with HMRC. We’ll give a quick outline of the most common options for content creators below.
Sole trader
Registering as a sole trader means you’ll pay income tax based on the total amount of income you get in a year.
For example, if you work for an employer then your salary will be taxed by them throughout the year. You won’t need to pay tax on this money again, but HMRC will add this amount to the money you get from being a content creator to work out your total taxable income. This is so they can use the correct tax rate for the chunk of income you get from your content.
If you’re classed as a ‘trader’ then you might also need to pay self-employed National Insurance on your content creator income.
Limited company
Limited companies are more complex, but they can be more tax-efficient depending on your level of earnings. A limited company is a legally separate entity to you as the owner, and pays Corporation Tax on its profits. You’ll only pay income tax and National Insurance on any money you take out of the business for yourself.
Do content creators need to register for VAT?
If you total taxable turnover exceeds the VAT threshold (which is currently £90,000) then yes – you’ll need to register for VAT.
You can also voluntarily register for VAT – some people do this so they can reclaim VAT if this helps them be more tax efficient.
Will I pay tax on the income I make on all platforms?
Yes – but it depends on how much you earn. You’ll need to let HMRC know about your content creation income if you’ve earned over the £1,000 trading allowance. It’s important to note you only get this allowance once in a tax year – you won’t get it separately for each platform!
What about any overseas income?
If you’re based in one country and earning income from another then the tax rules can get a bit trickier. You won’t normally need to pay tax on the same income twice, but the mechanism for this can vary.
Some countries will allow you to complete a tax form which confirms you don’t need to pay tax there (such as the W8-BEN form used in the US which UK Patreon creators will often encounter). Other countries will expect you to pay tax to them, but then you can claim tax relief on the amount when you submit a tax return to your local tax authority (such as HMRC if you’re in the UK).
It all depends on the tax treaty the countries have between them. It’s a big subject, so we look at it more closely in a separate article.
What expenses can I claim as a content creator?
The good news is you can claim a wide range of business expenses – as long as they are ‘wholly and exclusively’ for your business. It’s important you claim everything you can, because this amount is offset against your tax bill, helping to reduce it.
Content creators can claim allowable expenses such as:
- Equipment and technology
- Any subscriptions
- Software
- Giveaways you run on Instagram or other platforms
- The cost of running a business from home
- Travel
- Production costs (such as props and set design, costumes, etc)
- Any professional fees and admin for accounting, legal fees, banks fees etc.
- Marketing and promotion
- Training and development
Record keeping as a content creator
It is a legal requirement to keep clear records which show all your business activities, including any income or spending. For example:
- Income: This covers all earnings, both cash and non-cash, such as advertising revenue (from platforms like YouTube, TikTok, Meta, and Twitch), brand deals, affiliate commissions, subscriptions, and gifted items received in exchange for promotion.
- Expenses (business costs): Any allowable expenses that are wholly and exclusively for business purposes, such as editing software, website hosting, phone and internet bills, and other similar costs.
These records must be retained for at least five years from the submission deadline of the relevant tax year. Using reliable bookkeeping software can make this process much simpler and help ensure you stay compliant!
Call 020 3355 4047 to talk to one of the team about our online accounting and bookkeeping services, or get an instant online quote.
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