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Understanding VAT for UK Influencers: You Need to Know

Understanding VAT for UK Influencers: You Need to Know

Learn how VAT applies to UK influencers, including when to register, how to charge VAT on brand deals and digital products. Tips for compliance with HMRC.

Table Of Contents

As a UK influencer, you’re likely earning income from a variety of sources—brand deals, affiliate marketing, digital products, and more. While growing your online presence is exciting, it’s essential to understand your tax obligations, especially when it comes to Value Added Tax (VAT).

This article explains the key points UK influencers need to know about VAT to stay compliant with HMRC and avoid unnecessary tax issues.


What Is VAT?

VAT (Value Added Tax) is a tax charged on most goods and services sold by VAT-registered businesses in the UK. The standard VAT rate is currently 20%.

When you become VAT-registered, you must charge VAT on the services or products you sell, submit VAT returns, and pay any VAT due to HMRC. You can also reclaim VAT on eligible business expenses.


Do Influencers Need to Register for VAT?

Yes, if your taxable turnover exceeds £90,000 in any rolling 12-month period, you are legally required to register for VAT with HMRC.

Your taxable turnover includes income from:

  • Sponsored content and brand partnerships

  • Affiliate marketing

  • Digital product sales (e.g., eBooks, presets, courses)

  • Public appearances, consulting, or speaking gigs

  • Merchandise or other physical product sales

Even if your income is below the threshold, voluntary registration can be beneficial. You may be able to reclaim VAT on business-related purchases such as equipment, subscriptions, and travel.


What Happens After VAT Registration?

Once you’re VAT-registered, you are required to:

  • Charge VAT (typically 20%) on your taxable sales

  • Display VAT-inclusive prices for consumer services

  • Submit quarterly VAT returns to HMRC

  • Maintain digital records in accordance with Making Tax Digital (MTD) rules

For example, if you invoice a brand £1,000 for a campaign, you must add £200 VAT (20%), making the total invoice amount £1,200.


Are Influencer Services VATable?

Yes, most services provided by influencers are subject to VAT if you are VAT-registered.

Examples include:

  • Sponsored content for UK-based clients

  • Affiliate income from UK companies

  • Sale of digital products to UK customers

  • Product promotion or unboxing in exchange for value (including high-value gifts)

Services supplied to clients outside the UK may be considered outside the scope of UK VAT. However, this income still contributes to your VAT registration threshold and must be recorded.


What About Free Gifts from Brands?

If you are given free products in exchange for content creation or promotion, HMRC may treat this as a payment in kind. If you are VAT-registered, you must account for VAT on the fair market value of that product, provided it was part of a business arrangement.


Selling Digital and Physical Products

If you’re selling merchandise, templates, online courses, or other products, and you are VAT-registered, you must charge VAT on all applicable UK sales.

If you are selling to customers in the EU, especially digital products, you may need to register for the One-Stop Shop (OSS) scheme to ensure compliance with EU VAT requirements.


Key Tips for Influencers Managing VAT

  1. Track Your Turnover: Regularly monitor your income to ensure you don’t exceed the VAT threshold without realising.

  2. Invoice Properly: Include VAT details and your VAT registration number on every invoice.

  3. Use Accounting Software: Choose software compatible with Making Tax Digital to simplify record-keeping and VAT submissions.

  4. Reclaim VAT Where Appropriate: Claim back VAT on allowable business expenses.

  5. Seek Expert Advice: Working with an accountant who understands influencer businesses, like Accountants for Influencers, can help ensure you’re on the right track.


Final Thoughts

VAT is often overlooked by creators until it becomes a legal requirement. By understanding how VAT works and taking action early, you can avoid unexpected tax bills and manage your finances more effectively.

If you’re unsure whether you should register or how VAT applies to your business model, it’s best to consult with a professional who specialises in influencer accounting.

Thomas Edward

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