The digital creator economy is thriving, with influencers, content creators, and online entrepreneurs generating income through brand partnerships, advertising, and product sales. But as earnings grow, so do your tax responsibilities.
Understanding your tax obligations is crucial, especially as HMRC increases its focus on social media influencers and digital businesses. Whether you earn from sponsorships, affiliate links, or selling digital products, you must declare your income, file a tax return, and pay the correct taxes.
This guide explains everything influencers need to know about UK tax laws in 2025, including income tax, National Insurance, VAT, and allowable expenses, so you can stay compliant while optimising your tax position.
Do influencers need to pay tax?
If you make money from content creation, you’re classed as self-employed for tax purposes. This means that you’re responsible for:
- Declaring all income, even if it’s from multiple sources
- Paying income tax and National Insurance
- Filing an annual Self Assessment tax return
If your total income exceeds £12,570, you will be liable for tax.
Types of taxable income for influencers
Many influencers accidentally underreport earnings because they don’t realise what counts as taxable income. You must declare income from:
- Sponsored content, including payments from brands for Instagram posts, YouTube videos, or TikTok promotions
- Ad revenue from YouTube AdSense, Twitch, and TikTok Creator Fund
- Affiliate marketing, such as commission-based earnings from referral links and discount codes
- Brand gifting and PR packages, if you receive free items in exchange for posts
- Digital product sales, including e-books, templates, courses, and stock images
- Event appearances and speaking fees for hosting, speaking, or attending events
Even if you receive payment in products, services, or trips, HMRC considers it a taxable benefit if it’s given in exchange for promotion.
How much tax will you pay in 2025?
Income tax rates
The UK tax rates for 2025 are:
- 20% on earnings between £12,570 and £50,270
- 40% on earnings between £50,271 and £125,140
- 45% on earnings above £125,140
This applies to profits after business expenses are deducted.
National Insurance for influencers
From April 2025, self-employed influencers must pay:
- 9% on profits between £12,570 and £50,270
- 2% on profits above £50,270
Class 2 National Insurance has been abolished, simplifying payments. If your profits are below £6,725, you may want to make voluntary contributions to qualify for state benefits.
Do influencers need to register as self-employed?
If you earn more than £1,000 per year from self-employment, you must register with HMRC and file a Self Assessment tax return. For those earning between £1,000 and £3,000 HMRC plans to launch a simplified online platform to declare and pay any tax owed without need to complete a full Self Assessment form, however the timescale on this becoming legislation is not yet known.
Important deadlines
- 5 October 2025 – Deadline to register as self-employed
- 31 January 2026 – Deadline to file your tax return and pay any tax owed
Late submissions result in penalties and interest charges, so it’s crucial to stay on top of deadlines.
Do influencers need to pay VAT?
If your total annual turnover exceeds £90,000, you must register for VAT and charge 20% VAT on applicable sales.
When does VAT apply?
- Selling digital products like e-books, presets, or courses
- Offering coaching, consulting, or online memberships
- Running an influencer agency or service-based business
Some products, like e-books and audiobooks, may qualify for zero-rated VAT, but most influencer-related sales are taxable.
Do influencers need to declare free gifts and PR packages?
Brand gifting and PR – what’s taxable?
- If a brand sends you a product in exchange for a post, you must declare the market value as taxable income
- If a brand gifts you something with no obligation to post, it’s not taxable, but disclosure rules still apply under advertising regulations
- Free hotel stays, flights, beauty treatments, or services received as part of a partnership must be declared
HMRC is increasing its focus on influencer tax compliance, so keeping detailed records of all gifted items is essential.
What business expenses can influencers deduct?
Claiming allowable expenses reduces your taxable income, meaning you pay less tax. You can only claim expenses that are wholly and exclusively for business use.
Tax-deductible expenses for influencers
- Equipment, including cameras, microphones, tripods, lighting, and laptops
- Software and subscriptions such as Adobe, Canva, website hosting, and editing tools
- Marketing and advertising, including paid promotions on Instagram, Facebook, and YouTube
- Travel and accommodation costs if work-related, such as flights, trains, and hotels
- Office and studio costs, including rent, home office, and workspace hire
- Professional services, such as accountants, management fees, and legal costs
Personal expenses, like clothing or meals, cannot be claimed unless used specifically for content creation.
Common tax mistakes influencers make
- Not declaring free products or services received from brands
- Missing registration or filing deadlines, leading to HMRC penalties
- Incorrectly claiming personal expenses as business deductions
- Not setting aside money for tax payments, causing financial strain
- Failing to keep detailed income and expense records for audits
HMRC is closely monitoring influencer income, so keeping accurate records is crucial.
How Can Nordens Assist Content Creators With Their Tax?
Navigating the tax system can be challenging, especially for social media influencers dealing with complex income streams. Our expert tax team at Nordens will meticulously review your earnings, partnerships and financial records to ensure compliance with HMRC regulations.
For the 2025 tax year, deductions for influencers remain available. Expenses related to content creation, such as purchasing equipment, travel costs and even software subscriptions, may be deductible, reducing overall tax liability. Ensuring accurate reporting of income and expenses is crucial, and at Nordens, we are committed to helping influencers understand the tax system as it applies to their profession.
We hope this guide clarifies tax obligations for social media influencers in 2025. At Nordens we offer expert advice and assistance with all of your business needs: from your everyday accounting to Advisory, Tax, Audit and more. If you have any questions or require further assistance, please get in touch with Nordens, where our trusted advisers are happy to help.
