The influencer economy is booming. With over 16 million content creators in the UK alone, what started as bedroom hobbies has transformed into legitimate businesses worth billions.
HMRC is well aware of the vast digital economy and wants to ensure that everyone pays their taxes. Most content creators will be sole traders, submitting their finances to HMRC via the self-assessment system.
You are allowed to deduct allowable expenses from your bill, but there’s a lot more to this system than many assume or realise.
The secret lies in understanding allowable expenses. As a content creator, you’re essentially running a business, which means you can claim back costs that are directly related to generating your income. The problem? Most influencers and creators have no idea what they can actually claim.
Read on to learn about taxation for influencers and how influencers and content creators can reduce their tax bills through legitimate means.
HMRC is Watching: The Content Creator Crackdown
Before diving into tax-saving strategies, it’s essential to understand the scenario in which you’re operating. HMRC has content creators firmly in its sights, and the consequences of getting your tax wrong are getting more serious.
HMRC has already sent “nudge letters” to over 4,300 influencers and content creators, with 2,300 targeting social media creators and another 2,000 focusing on online marketplace sellers.
Nudge letters essentially inform people that they’re likely not handling their tax affairs in accordance with the law. HMRC has been collecting data from platforms like Instagram, TikTok, YouTube, and eBay to identify creators who may not have declared all their income.
The letters are blunt: “We have information that shows you’ve earned money from creating content on digital platforms. We also have information that shows that you have not told us about some or all of this income.”
HMRC isn’t guessing – they have the data to back up their claims. Court cases are not out of the question for those who deliberately avoid tax, or fail to register for self-assessment for a long period of time.
On that note, read about when and how to register for self-assessment here.
The Foundation: Understanding Allowable Expenses
HMRC has a simple rule for business expenses: they must be incurred “wholly and exclusively” for the purposes of your trade.
For content creators, this opens up a world of possibilities. The test is straightforward – would you have bought this item or service if you weren’t creating content? If the answer is no, it’s likely claimable.
Think about everything you spend money on to create content, build your audience, and run your online business.
Most of these costs are likely deductible in full or partially, provided you know what to look for and maintain proper records. The key is demonstrating a clear business purpose for every expense you claim.
Claiming Partly Business-Related Expenses
Many creators assume they can claim a percentage of any expense that’s partly business-related, but this is where things get complicated.
The “wholly and exclusively” rule is strict, but HMRC allows apportionment in specific circumstances where a clear business portion can be identified.
The key test is whether you can separate out a specific part of the expense that was incurred wholly and exclusively for business purposes. If you can identify and measure this business element, you may be able to claim it.
You CAN claim percentages for:
- Identifiable business portions where you can separate specific business use (like individual business calls on a phone bill)
- Home office costs, including utilities, council tax, and mortgage interest for dedicated business areas
- Vehicle expenses where you can identify specific business journeys versus personal travel
- Dual-use equipment like phones, computers, and cameras, where you can demonstrate measurable business usage
- Communication costs where you can evidence the business element of usage
You CANNOT claim percentages for:
- Expenses with inseparable dual purposes where business and personal motivations are mixed throughout (meals with clients, entertainment)
- Travel with combined business/personal purposes (holidays with business meetings, trips serving multiple purposes)
- Clothing worn in content but also suitable for everyday wear
- Any expense where you cannot separate the business purpose from personal benefit
The crucial distinction is between apportionable expenses (where you can identify a specific business portion) and dual-purpose expenses (where business and personal motivations are inseparably mixed).
For example, you can apportion phone costs because you can identify specific business calls, but you can’t apportion a client meal because you can’t separate eating for business from eating for personal sustenance. Business and personal purposes often overlap and cannot be easily distinguished.
Note that the rules can change. You should work with an accountant if you’re unsure.
Equipment and Technology: Your Creative Arsenal
Content creation is fundamentally equipment-heavy, and this is where most creators can make substantial savings.
Every piece of kit you buy to improve your content quality or streamline your workflow is potentially claimable. The beauty of equipment expenses is that they’re usually clear-cut – if you bought it specifically for content creation, it almost certainly qualifies.
Many creators underestimate the amount they spend on technology throughout the year. From the obvious cameras and microphones to the smaller accessories, such as memory cards and cables, it all adds up. The crucial point is that you can claim the full cost in the year you buy it, or spread it over several years through capital allowances.
Here are some essentials:
- Professional cameras, DSLRs, and mirrorless cameras, plus all lenses
- Video equipment, including gimbals, tripods, and stabilisers
- Audio gear: microphones, audio interfaces, and recording equipment
- Lighting setup,s including ring lights, softboxes, and LED panels
- Computing hardware: laptops, desktops, tablets, and phones used for business
- Editing software subscriptions like Adobe Creative Cloud
- Cloud storage services for backing up content
- External hard drives and memory cards
- Protective cases, camera bags, and equipment storage
- Cables, adaptors, and technical accessories
Smartphones and Personal Use Items
Your smartphone is likely your most frequently used content creation tool, but it’s also personal.
You can claim the business portion of costs, including the phone itself, monthly contracts, and accessories. If you estimate 60% business use, you can claim 60% of all related costs. Keep a simple log for a few weeks to establish a reasonable percentage of business use.
The same principle applies to laptops, tablets, and other dual-use items. The key is being honest about business use and being able to justify your percentage if HMRC asks.
Software and Subscriptions
Modern content creation is impossible without software, and subscription costs mount up faster than most creators realise. These recurring monthly and annual fees are often forgotten when calculating expenses, but they can easily total several thousand pounds per year.
Every app, platform, or service that helps you create, edit, schedule, or analyse your content is potentially claimable.
The subscription economy has experienced significant growth in recent years, and content creators are often among the first to adopt new tools. From basic editing apps to sophisticated analytics platforms, these tools are the invisible infrastructure of your business. The key is maintaining detailed records of what each subscription does for your business.
Some key software and subscription costs:
- Video editing software like Final Cut Pro, Adobe Premiere, or DaVinci Resolve
- Photo editing tools, including Photoshop, Lightroom, and Canva Pro
- Music licencing for Epidemic Sound, Artlist, or similar services
- Stock photography subscriptions like Shutterstock or Unsplash+
- Social media management tools such as Hootsuite, Buffer, or Later
- Analytics platforms like Social Blade or platform-specific insights tools
- Email marketing services like Mailchimp or ConvertKit
- Website builders and hosting services
- Online storage solutions beyond basic free tiers
- Productivity apps and project management tools
- Screen recording and streaming software
- Font licencing and design asset subscriptions
Home Office Costs
HMRC distinguishes between occasional home working and having a dedicated business space. If you’ve set up a proper home studio or office that’s used exclusively for content creation, you can claim a portion of your household running costs.
The key word here is “exclusively.” Your bedroom doesn’t count if you also sleep in it, but a spare room converted into a studio with permanent lighting rigs and filming equipment does. Even a corner of a room can qualify if it’s clearly demarcated and used exclusively for business purposes.
The calculations can be done in two ways: the simplified flat-rate method or the actual cost method. For heavy home users, the actual cost method usually gives better results but requires more detailed record-keeping.
Read more about claiming home office expenses on HMRC’s website.
Travel and Transport
Content creation increasingly involves travel, whether for collaborations, events, or finding the perfect filming locations. These journeys represent legitimate business expenses; however, the rules surrounding travel can be complex. The fundamental principle is that travel must be for business purposes and not part of your ordinary commuting.
Understanding what qualifies as business travel versus personal travel is crucial. Travelling from your home office to a brand collaboration is business travel. Going to your regular co-working space is commuting. The distinction matters because commuting costs are never allowable, whereas genuine business travel is almost always allowable.
Mileage claims are particularly valuable for creators who frequently drive for content creation purposes. At 45p per mile for the first 10,000 business miles annually, costs accumulate quickly for active creators.
Professional Development: Investing in Your Skills
HMRC recognises that professional development directly benefits your trade, making most learning-related expenses allowable. This isn’t just about formal qualifications – any training that enhances your content creation abilities or business skills typically qualifies.
The creator economy requires a diverse range of skills, encompassing videography, photography, marketing, and business management. The key is demonstrating a clear connection between the learning and your content creation activities.
Here are some important examples:
- Industry conferences like VidCon, Social Media Week, or Creator Economy Report events
- Online courses for photography, videography, or editing skills
- Business skills training, including marketing, finance, or entrepreneurship
- Workshops on platform-specific techniques or algorithm changes
- Coaching programmes for content strategy or business growth
- Books, ebooks, and educational materials relevant to your niche
- Networking events and creator meetups
- Subscriptions to industry publications and research reports
- Masterclasses and premium educational content
- Professional memberships to industry bodies
- Certification programmes for specialised skills
Proving Business Relevance
Keep records showing how each learning opportunity relates to your content creation business.
A receipt for a photography course is sufficient; a receipt accompanied by notes on how you applied the techniques in your content is even better. This documentation helps if HMRC questions the business relevance of your professional development claims.
Marketing and Promotion
Building an audience requires strategic investment in marketing, and virtually all promotional costs qualify as business expenses.
Many creators view marketing as solely paid advertising, but it encompasses everything you spend to increase visibility, engagement, and audience growth. From website hosting to collaboration costs and marketing expenses, the costs can be surprisingly diverse.
Here are some key costs you can usually claim:
- Website hosting, domain registration, and maintenance costs
- Paid advertising across all platforms, including Instagram, YouTube, and TikTok
- Social media management and scheduling tools
- Email marketing platform subscriptions and automation tools
- Graphic design services for logos, thumbnails, and branded content
- Photography and videography services for professional content
- Influencer collaboration costs and guest creator fees
- Promotional merchandise and giveaway prizes
- Business cards, flyers, and printed marketing materials
- PR services and press release distribution
- SEO tools and website optimisation services
- Contest and giveaway platform fees
Collaboration and Cross-Promotion Costs
When you pay other creators for collaborations or cross-promotion, these costs are allowable. This includes paying for guest appearances, joint content creation, or featuring in other creators’ content. Ensure you have clear documentation of the business arrangement and its purpose.
The Clothing Conundrum – Be Aware
Clothing expenses for content creators occupy a dangerous grey area in tax law, and the case of G Daniels v HMRC provides a sobering lesson about the limits of what you can claim.
Whilst this case is often cited as a “win” for clothing expenses, the reality is far more complex and concerning for content creators.
Ms Daniels was a self-employed exotic dancer at Stringfellows who claimed expenses for stage costumes, lingerie, dry cleaning, makeup, beauty treatments, and hairdressing. HMRC disallowed 80% of her clothing and cosmetics claims, and she was penalised for being “careless” with her tax obligations.
The tribunal criticised her poor record-keeping, noting that less than 10% of her claimed expenses could be backed up by proper invoices and receipts.
Even where HMRC accepted the principle that some clothing was costume-like, the lack of documentation meant most claims were rejected.
Her travel expenses were disallowed entirely, and she faced substantial penalties that were only reduced because the judge found HMRC “unreasonable.”
Therefore, even when you may have a theoretical right to claim performance-related clothing, inadequate documentation and record-keeping can result in most expenses being disallowed and penalties being imposed.
Documentation is Key!
The Daniels case demonstrates that having a theoretical right to claim expenses is meaningless without proper documentation. People simply don’t take this seriously enough.
Even when HMRC accepted the principle that some of her clothing was costume-like, the lack of receipts and records meant most claims were rejected.
For content creators, this highlights the crucial importance of maintaining detailed records for any clothing or appearance-related expenses you intend to claim. You need receipts, evidence of exclusive business use, and clear documentation of why the item couldn’t be worn outside of content creation.
What You Definitely Can’t Claim
Understanding the boundaries of allowable expenses is just as important as knowing what you can claim.
HMRC takes a dim view of inappropriate claims, and penalties for incorrect deductions can be severe. The “wholly and exclusively” rule provides clear guidance, but some areas cause particular confusion for content creators.
Personal expenses remain non-allowable, even if they are indirectly related to your content.
The key test is whether you would have incurred the cost regardless of your content creation activities (and thus your business).
Non-allowable expenses include:
- Personal clothing and everyday items worn in content
- Meals and entertainment for personal enjoyment
- Personal portions of mixed-use items, like family holidays
- Fines, penalties, and parking tickets
- Personal healthcare and insurance costs
- Commuting costs to regular workplaces
- Personal subscriptions to entertainment services
- Everyday household expenses not related to business use
- Personal education unrelated to content creation
- Family expenses disguised as business costs
Many expenses involve both personal and business elements. Your mobile phone contract, home internet, or car expenses might be partially claimable, but you must apportion costs fairly.
In these scenarios, you should contact an accountant for advice.
You Don’t Need to Navigate This Alone
Content creation might feel like a creative pursuit, but you’re running a sophisticated business.
HMRC’s recent crackdown demonstrates the severe consequences of getting it wrong – we will not be surprised if more creators and influencers dodging tax face issues from HMRC in the months and years ahead.
You need professional help when:
- Your annual income is increasing quickly, or you’re facing higher tax rates
- You’re considering incorporation for tax efficiency
- You’re receiving HMRC nudge letters or facing investigations
- You’re managing multiple income streams or international partnerships
- You’re handling complex gifted products and brand collaborations
If you need help, you’re in the right place. At Double Point, we’ve worked with numerous influencers and content creators. Our chartered accountants understand the nuances involved and can help you with your taxes and financial planning.
Our clients typically save far more in reduced tax bills than they invest in professional fees, whilst gaining peace of mind that their affairs are properly structured and compliant.
Why not book a free consultation today? We’ll review your situation, identify missed opportunities, and show you exactly how much you could save.
