The blogger’s guide to paying tax
Some people blog for fun, others have built whole blogging-business empires. So when exactly does a blog become a business, and what does this mean for paying tax?
In this guide, we cover everything you need to know, including:
> When do bloggers need to start thinking about paying tax?
> Does being a blogger mean I’m self-employed?
> How to register as a sole trader with HMRC
> What if I work in a ‘regular’ job, and earn money from blogging on the side?
> Common tax deductions (business expenses) for bloggers and influencers
> Does ‘gifting’ count as self-employed income?
> How do bloggers and influencers pay taxes?
> What tax and National Insurance might I owe as a blogger?
We also have a comprehensive guide on self-employed business expenses, which might be useful.
When do bloggers need to start thinking about paying tax?
Whether you run a food, lifestyle, music blog or something else – you’ll need to think about tax the minute you make £1000 or more from your blogging activity. That’s not to say you’ll necessarily owe any tax at this point (more on that later), but you will need to file a tax return. It’s also important to keep track of your income and any business expenses as soon as you earn any money at all. You never know if or when you might pass that £1k threshold, so it’s a smart move to be prepared.
Before we get started, here are some useful terms to know:
Tax return/Self Assessment
‘Self Assessment’ is the official name of doing a tax return, which is where you fill out forms to tell HMRC all about your income for the year. It’s also where you calculate how much tax and National Insurance you owe. This is based on how much you’ve earned, minus your business expenses and other areas of ‘tax relief’ (that’s stuff you don’t have to pay tax on, like most types of pension payments).
Trading allowance
Everyone in the UK gets a £1000 trading allowance. This means you don’t need to declare income under £1000 earned from self-employed work, like blogging.
Personal allowance
Everyone in the UK gets a £12,570 personal allowance, which is the amount of money you can earn without having to pay any tax. But that’s total money earned – not just from your blogging. So if you work full-time with a salary of, say, £22,000, and also make about £2000 a year from your blog, you’ll have to pay tax on £11,430 minus any business expenses. (That’s £22k salary + £2k blog earnings – £12,570 personal allowance).
Here’s a quick look at some examples of what counts as earning money from blogging. You’ll need to think about tax if you:
- Include cost per click adverts on your blog
- Let people pay you in exchange for writing/hosting an article about their product/service on your blog (sponsored posts)
- Receive gifts from brands in exchange for reviewing them on your blog or social media, like make-up, technology, or food & drink stuff
- Get paid to write for other publications
- Promote other company’s products for services on your blog in exchange for a sales commission
- Sell tickets to things like webinars or talks that you host in relation to your blog
- Sell any other kind of content, like downloadable PDFs, off the back of your blog
Does being a blogger mean I’m self-employed?
If you earn more than £1,000 a year from your blog, then yes – that money is classed as self-employed income. It also means you’ll have to register as a sole trader, so you can fill out a tax return.
What if I work in a ‘regular’ job, and earn money from blogging on the side?
If you’re employed by someone else, but run your blog more as a ‘side hustle’, you’ll still need to register as a sole trader if your blog brings home more than £1000 a year. We have an article about what tax you owe when you have a job plus side income.
Common tax deductions (business expenses) for bloggers and influencers
Whatever kind of blog you run, or influencer activity you’re involved in, there’ll be certain costs associated with the work you do.
These can be listed as business expenses when you do your tax return. The total cost of them then gets taken off your total income for the year, lowering the amount of tax you owe overall.
It’s important to note that to claim the full amount of something as a business expense it needs to be used solely for your work as a blogger. Otherwise you can only claim a percentage of it (or maybe even not at all if it’s one of the areas HMRC is strict over, like gym memberships).
Say, for example, you use a camera for your blog but use it for other stuff too, like holidays. You’d have to work out what percentage of the time you use it for your blog – and that’s how you’d work out how much of its value you can write off your tax bill.
A quick note on the trading allowance
HMRC has a system that lets you claim a flat figure of £1000 for all business expenses, if you want to. It’s designed this to help people who don’t have many business expenses save time by just claiming the flat £1k, instead of adding up individual expenses.
But at Finmo, we always recommend going down the actual business expense route. It’s usually surprising how much you rack up with things like home office expenses and equipment, so you might end up overpaying on your tax bill if you use the flat trading allowance rate.
Let’s take a look at some typical costs that bloggers and influencers can claim
Blogging/influencer-specific expenses
- Food and drink produce if you’re a food blogger
- Lighting and camera equipment for shoots, say if you’re a fashion blogger
- Non-gifted products you buy to review, like headphones if you’re a tech blogger
- Prizes you buy for giveaways and competitions
- Make-up and other beauty products for shoots and videos
General running costs
- Website design and build
- Website hosting
- Cloud/data storage
- Editing software
- Mobile phone bill
- Accountancy costs (like if you use a platform like Finmo, or hire an accountant to help with your Self Assessment)
- SEO (Search Engine Optimisation) costs
- Paid digital promotions, like on Facebook, Instagram and Google
- Using a photographer or buying stock images
- Prizes for giveaways
- Licenses, e.g. for music used as a backing track on a social media post
- Software and subscriptions
Professional development costs
- Training courses
- Conferences and networking events
- Subscriptions and memberships
- Paid press trips
Equipment costs
- Training courses
- Conferences and networking events
- Subscriptions and memberships
- Paid press trips
Travel costs
- Transport tickets if you have to travel somewhere temporarily for your blogging – say you had to travel to another city to review a music festival
- Food & drink costs (within reason) if you had to travel somewhere temporarily for your blogging
You can’t claim travel expenses if they’re not for temporary travel. That means you can’t claim the train fare to and from the communal workspace you use, for example. Or you wouldn’t be able to claim the drinks you buy from the coffee shop you regularly write from.
Does ‘gifting’ count as self-employed income?
As a blogger, you’re probably familiar with the concept of being ‘gifted’ products or experiences. A stay at a five-star hotel, make-up, skincare, protein shakes, gym bikes… pretty much anything can be gifted in exchange for a feature on your blog or social channels.
What’s important to know is that, when it comes to paying your tax bill, these gifts are classed as income. That means HMRC expects you to include the monetary value of them in your total income for the year when you do your tax return.
This is all outlined by the Competition and Markets Authority (CMA):
“The CMA considers payment to be any form of reward, including money,
gifts of services or products, or the loan of a product.”
You can read more about that here.
The CMA also says that even free gifts sent without warning are classed as a payment.
This is why it’s crucial to be aware of the exact value of any item of experience that you’re gifted – because you’re technically going to end up paying tax on it. So when you accept gifts, you’ll need to make sure you’re happy to take that as a payment. And, most importantly, that you’re able to save enough actual money to pay the tax on it.
What tax and National Insurance might I owe as a blogger?
How much tax and National Insurance you owe will depend on how much money you make in total across the financial year. That includes everything you make from your blogging/influencer work, plus any other kinds of income – like from a full-time or part-time job, or from selling assets (like making profit on a house sale).
The tax rates in England, Wales and Northern Ireland are:
| Band | Taxable Income | Tax rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £150,000 | 40% |
| Additional rate | over £150,000 | 45% |
The tax rates in Scotland are:
| Band | Taxable Income | Scottish Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £14,667 | 19% |
| Basic rate | £14,668 to £25,296 | 20% |
| Intermediate rate | £25,297 to £43,662 | 21% |
| Higher rate | £43,663 to £150,000 | 41% |
| Top rate | over £150,000 | 46% |
The current National Insurance rates are:
| Class | Rate for tax year 2021 to 2022 |
|---|---|
| Class 2 | £3.05 a week |
| Class 4 | 9% on profits between £9,569 and £50,270
2% on profits over £50,270 |