Revenue have recently indicated that media Influencers would be an area of their focus for tax compliance.

In this blog we will take a look at the various income streams for Influencers, and the areas where there may be a level of non-compliance.

Income Streams

There are many avenues of income streams for a media influencer:

• Affiliate Marketing and Referral Programs. Influencers can earn commissions by promoting products or services on social media through unique referral links.
• Subscriptions. Many social media platforms now offer creators the option to charge a monthly subscription fee in exchange for premium content. 
• Consulting Services. Influencers with a solid following are already experts in several social media tactics. With time, they gain experience and can sell their expertise to others.
• Sponsored Posts. Influencers and sponsored posts go hand-in-hand. They generally curate content around paid partnerships with brands globally.
• Sponsored Content. Another way influencers can make money from digital products is to co-create content with brands, either by selling advertising and editorial space to them, or by being commissioned specifically to create content.
• Payments From Social Platforms. Influencers can also earn money directly from the platform. For example, YouTube has a Partner Program that allows creators to make money from ads on their videos.
• Brand ambassadorships and long-term partnerships offer influencers a steady and reliable source of income.
• Public appearances. As they grow their following, people will begin to recognize them like any other celebrity. That means they have the power to make money from event appearances and public speaking.
• Personalised merchandise and branded products.  Branded merchandise is offered for sale to followers.

Tax Considerations

• Income tax/Corporation Tax paid on various income streams if sole trader[JC1] [PA2] /company.
• Income includes free products given to influencers in lieu of money.
• Tax on the free use of a product – e.g. a car – tax would be levied based on the lease value of the car in the open market.
• VAT – 2 thresholds – supply of service and supply of goods
• Place of supply issues – distance selling of goods
• Place of supply issues – streaming/performances
• Possible VAT registration in other member states.
• Capital Gains Tax – If you sell the rights to a channel it will be a disposal for CGT

Revenue  Information Sources

Social media platform operators are obliged to make returns to Revenue which show payments to individuals/companies

Tax returns from suppliers to influencers – e.g. VAT return for a supplier of goods e.g. Ebay.

Information from other EU states to Revenue

Tax authorities worldwide may share information under tax treaty requirements.

Revenue monitoring sites such as Meta/Facebook and X

Review

If you have any clients in the social media influencer space perhaps now would be a good time for a review of their tax compliance.

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