At Nordens, we pride ourselves on working with all types of businesses from construction to legal, hospitality to sport. Our dedicated specialist teams work with certain industries to offer the most up to date and knowledgeable information. This allows us to provide the highest quality service available.
One of the sectors we deal within is creative and media, specifically the social media influencer industry. We spoke to one of our good friends and clients, Stevo The Madman, on his incredible journey from retired footballer to social media juggernaut, as well as the tax and financial implications that his line of work delivers. This is part of our ongoing series looking at the tax implications for those within the social media industry. Here’s what Stevo had to say…
Firstly, tell us a bit about yourself, your business ventures and how you got to where you are?
I’m Stevo The Madman, and the best thing about my journey is that it’s been strictly organic. For the first 3 years of my journey, the social media industry was non-existent and void of any monetisation. The only route that seemed possible was to progress into the TV industry. I wanted to showcase my daily life through the medium of filming, and so I did everything on Snapchat. This is still for me the predominant social channel I use. My talent has always been turning something very normal into a story. I consider myself a digital storyteller. Essentially, I just found lots of relatable things that people could engage with. From having to top up the soap dispensers to adding water to ketchup. People were relating to the stories I was telling.
My life started to change quite a bit, and with that so did the content. Fortunately, I’ve always stayed grounded and been able to move with the change. This is probably why I’ve gone on so long. It’s enabled me to grow a close personal relationship with my audience, my Spartans. I introduced the merchandise sales quite early into my tenure which was my first business venture per se. Since then, I’ve expanded my investments from opening a restaurant to a few side hustles here and there.
I’ve decided recently though that I’ve not really got that boss mentality in me. I don’t really like telling people what to do. I still invest in small businesses here and there which I’m passionate about. First and foremost though, I’m an innovator and a creator and that’s what I do best.
Have you always found it easy sorting out your taxes in your lines of work as a collective, or is it continually bringing up new individual grey areas which can get confusing?
Yes it’s confusing. For instance, in Germany you don’t need to pay taxes if you’re a YouTuber. There’s lots of little things in this industry that you only know once you get to that hurdle. I’ve just started to monetise my Snapchat. I was one of the first to be a part of the Beta version which has been trialled in the UK. When setting up the payments, we had to abide by US tax rules and regulations. There was no one I could really call on who had an extensive knowledge of this. Fortunately, Nordens gave me a few pointers and taught me the basics. Even then though, it still felt massively out my remit.
Because I was one of the first to do a lot of things within the social media industry in the UK, it’s been challenging at times. Now, I’ve got friends and fellow influencers who are teaching me things financially. It’s good to share knowledge and help each other out. In the early days when I was starting out, there was so much confusion with how to get paid. Things like whether to set up as a limited company or a sole trader were questions that needed answering. For many years, there were so many influencers who were just getting paid on the side and not paying taxes. This was purely because it was such a new industry that no one knew what to do.
In 2019, the CMA (Competition & Markets Authority) began clamping down on social media influencers regarding the transparency of endorsements and sponsored posts. Do you believe there’s a problem of influencer figures avoiding paying taxes or disclosing the correct financial information?
The shadiness is definitely there, but most of the time it’s not from the influencer. Basically, we use our time and our resources to create content that we’d just like to get out to followers. What happens is when you have to put ‘#ad’ for a sponsored post it limits your reach. What the social media platforms want is for the influencer to use their boost tools. Of course you need to pay for these.
Predominantly, if a big brand like Nike or Adidas want to use us to showcase their products, the way the social media platforms see it is that we’re taking away money from them. They want the big brands and the influencers to come through them. This is so they’re getting a slice of the pie, rather than being used to make money. Not many influencers actually know that the social media platforms are basically the competition. That’s how they see it.
I’m only aware of this is because my brand has been built on data and high levels of interaction and engagement. I never had that many followers as a YouTuber, but what I had was strong engagement from my followers. So I’ve had to study it in terms of making the biggest splash possible with what I’ve got. This is why a lot of us don’t want to put ‘#ad’ and all that but unfortunately the algorithm is so strong. As soon as you mention a brand nowadays, it automatically restricts and limits your reach on a post.
Is there shadiness going on? Yes. Is it from some influencers? Yes. However, the main suspicious activity is definitely from the platforms who are the ones that have the agenda.
I know your daughters have their own dedicated social accounts, how is that in terms of declaring and filing, do the laws differ in terms of minors?
To be honest, we have everything under one umbrella. With my daughter Erin, all the money from her T-shirt sales I’ve set aside for her. She can do what she wants with it when the time’s right. Same with Kaci, she got some Off-White trainers from a sponsorship she did and the value of them are constantly going up. As soon as Virgil died, RIP Virgil, the price rose a lot, so she’s sitting on that.
In terms of the legislation changes around tax, it’s always throwing up new stuff. Will it be worth putting one of the girls as a director, this is something I need to visit and talk about extensively with Nordens to weigh it up. Unfortunately, the way my life is within the industry it’s hard to plan things as new things are always cropping up. I’d love to be able to take a few weeks off and get all my financial affairs in order but there just isn’t the time available for me. Unfortunately, it’s all about the clout in this game and I have to stay relevant in order to be successful.
Is enough being done to educate and inform the younger generation, as well as those from minority backgrounds, on the UK tax and financial system? Whether that be in school, further education, or even from businesses?
Absolutely, flippin’ not! It’s a shame, I’m 38 and it’s only the last three years where I’ve been able to learn about taxes and how important they are. It’s mad that the authorities will punish you so heavily for not getting something right, yet they don’t teach you enough so you don’t make the mistakes. Let’s look at social media, there’s so much new money in the industry. But there’s still so many grey areas around it. Having a fully formed set of tax laws and regulations around the social media industry could bring about so much positivity for the industry and for the economy in general. I’ve heard about so many people, from different industries also, that are getting in trouble purely for the fact that they genuinely don’t know the ins and outs of it all.
If this was taught in school, or at least the basics, it could bring about so much change. For instance, one of my daughters came home from school the other day talking about Greek mathematics and algebra. In the vast number of jobs in the UK, where does this become relevant or is good practice? They’re only shooting themselves in the foot as by not educating people on finances and taxes, it means people are less likely to save and be in trouble and therefore contribute to a shrinking economy. With people not knowing how to take care of their money, it’s making a select few at the top a lot of money which is scary but it’s definitely going on.
If they don’t start putting this in the school system and switching up the curriculum, then big corporations are going to start doing so. I believe soon that people will start to go to schools run by companies like Amazon, where the curriculum is different and more modernised. The schooling system presently, and has been for decades, teaches you to conform. The world has moved on and the youth nowadays want to experience life and do things differently.
How have Nordens helped you with your tax payments and accounts? Do you believe accountancy firms can promote their services more to those who work within social media?
As I’ve said, I speak to a lot of my influencer friends and they don’t know a lot when it comes to finances. The knowledge I’ve acquired comes from Nordens and its educational resources. Hold tight Darren, hold tight Mitch, and all the crew who have genuinely helped me so much. Of course, more can always still be done especially right across the accountancy industry. I’ve said this to Nordens that the social media industry is desperate to acquire this knowledge and progress it forward from its infancy, cowboy-like era it’s currently in. There’s so many little rules and pieces of legislation that the average person doesn’t know about.
I’m lucky that Nordens have a specialist team for those within the creative and media sectors, so they have the experience needed to deal with my finances. Nordens are definitely ahead of the game and I can’t commend them enough, but as a whole there needs to be more awareness and education for the greater good.
We hope this has outlined to you some of the grey areas that social media influencers experience around tax. If you’d like to know any further information on anything mentioned, or anything accounting related for that matter, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy talking you through your query.