Being an influencer comes with exciting opportunities — but also unique tax responsibilities. If you regularly receive free merchandise or collaborate with brands, it is important to understand what counts as income. This guide from UK influencer accountants explains how to stay compliant while maximising your earnings.
If you are an influencer in the UK receiving gifted items, brand deals, or affiliate income, you may be unsure how this affects your tax position. That is where influencer accountants like Power Accountax can help.
In this blog, we explain what HMRC expects, when gifted products are considered income, what expenses you can claim, and whether setting up a limited company is the right move.
Are Gifted Items Taxable?
In most cases, the answer is yes. If a brand sends you something in exchange for content. such as an Instagram post. YouTube video. or TikTok reel. HMRC considers this a form of non-monetary income.. This means the market value of the item must be declared as income.
For example. if you receive a luxury skincare set worth £500 for a TikTok review. you are expected to include that £500 as income on your Self Assessment tax return. If a gift is completely unsolicited and there is no expectation of content in return, it may not be taxable. However, these situations are rare and often unclear, so it is important to keep good records and supporting evidence.
What Can Influencers Claim as Expenses?
- Mobile phone bills (only the business use portion)
- Cameras, tripods, lighting, and editing equipment
- Subscription software such as Canva Pro or Later
- Home office costs (a portion of rent, electricity, heating)
- Business travel, accommodation, and fuel
- Clothing and props used exclusively for content creation
Accountant fees or the cost of a virtual assistant
https://www.gov.uk/self-assessment-tax-returns
Should Influencers Set Up a Limited Company? Advice from Influencer Accountants
That depends on your income level and how you work with brands. Many influencers begin as sole traders, but forming a limited company can offer several advantages.
Potential Benefits:
– Corporation tax rates are currently lower than higher personal tax rates
– You have more control over how and when you pay yourself (salary and dividends)
– It can improve your credibility with agencies and brands
– Your personal assets are protected because liability is limited to the company
However, a limited company also comes with more responsibilities. You must file annual accounts, register for Corporation Tax, and possibly run payroll if you pay yourself a salary.
At Power Accountax, we help influencers across the UK decide whether staying as a sole trader or moving to a limited company is the best option for their goals. Our team of influencer accountants will walk you through the pros and cons based on your income and future plans.
Why Work with Influencer Accountants Who Understand the UK Creator Economy
The world of content creation is fast-paced and constantly changing. At Power Accountax, we work with a wide range of digital creators including:
– Lifestyle influencers
– YouTubers and vloggers
– Fitness and wellness coaches
– TikTok creators
– Fashion bloggers and brand ambassadors
Whether you are just starting out or have multiple income streams from collaborations and monetisation platforms, we provide clear, reliable advice to help you manage your money with confidence.
Summary: What You Need to Know
- Gifted merchandise is usually taxable if content is expected in return.
- Expenses can be deducted if they are allowable business costs.
- Setting up a limited company can offer tax benefits and protection, but it comes with more responsibilities.
Need Personalised Advice?
If you are unsure about your tax obligations, or whether a limited company is right for you, it is best to speak to an accountant who understands the influencer world. Contact our expert influencer accountants today to get clear, personalised advice.
👉 Contact Power Accountax today: https://poweraccountax.co.uk/contact-us/