VAT and UK Influencers

We have prepared a list of the top 10 things that UK-based influencers and content creators should be aware of for VAT.

1. Mandatory £90,000 Registration Threshold – Making £90,000 taxable turnover in 12 months (not calendar years) triggers a requirement to register for UK VAT. Common taxable income types are listed below, and you will need to add them all together to see if the threshold has been exceeded.
2. Sponsorships – Sponsorship income is considered VATable and will count towards your VAT registration threshold.
3. Advertisements and creator links – The Income you receive for advertising products is VATable. This also applies where you don’t get paid directly but keep the product after the advertisement (the product value would be considered income).
4. Commissions – One of your followers has commissioned something to be made? That’s income for VAT and will likely count towards your registration threshold (though this does depend on what is made and where your customer is located).
5. Merchandise – Selling branded merchandise counts towards your taxable turnover, and there are additional complications where this involves overseas persons (either as a supplier or customer).
6. Membership platforms – Membership platforms such as Patreon typically account for VAT on the creator’s behalf and so would not count towards your £90,000 threshold. However, if you run your own membership subscription, then this would count as your own taxable income.
7. Competitions and giveaways – Giveaways are a great way to engage your audience, but VAT adds an additional layer of complexity that needs to be considered, like do you need to account for VAT on the gift or if you are running a lottery.
8. Content costs and expenses – Income received by influencers is typically taxable; as such, being VAT registered allows you to reclaim VAT on costs related to your content. You can register for VAT voluntarily and look to recover VAT on expensive equipment.
9. HMRC Expect you to get it right – VAT is a self-assessing tax, which means HMRC expect you to know the treatment of the supplies you make (and will penalise you for getting it wrong). Not knowing is not an excuse for HMRC.
10. When to register for VAT – Once you exceed £90,000 taxable income for the past 12 months (rolling), you have only one month to register with HMRC before they consider late registration penalties.

There are lots of ways VAT can impact influencers and content creators, which can go unnoticed before it’s too late. It is much better to get your VAT right upfront, especially as your business grows and the values involved get bigger, to hopefully avoid expensive corrections in the future.

If you want to speak to one of our internal VAT specialists, please contact Nicholas Robson or your usual Crowe contacts.