Social media tax: allowable business expenses

As a social media Influencer you may be earning income from marketing activities, advertising fees, royalties from sales of products or services or subscription services fees.

If you have spent money on expenses to earn the above forms of income then those are business expenses and you might be eligible to claim part or all of such expenses against your income. The difference will be liable to tax.

Typical business expenses might include laptops, PCs, cameras and photographic equipment and props for photoshoots. If you have created a website, incur hosting or SEO costs, Google or Facebook Ads or other advertising, these online costs can be claimed.

If you use a car for business, incur travel and hotel costs to meet clients, attend business meetings or for photo-shoots away from your normal place of work then these costs can be claimed too.

If you work from home then you might be eligible to claim a proportion of your home bills that can be allocated for business purposes. If you hire an external office or rent a studio for recordings or photo-shoots including props, lighting and other such aids then these can be business expenses too.

Mobile phone, broadband, internet, software and other such communication, media and “tech” costs can be claimed as well as costs incurred for the services of recording / sound engineers, photographers, video editors and other sub-contractors.

Fees incurred for the services of accountants, lawyers and other such professionals in connection with your business can also be claimed against your social media income.

You should open a separate “business” bank account into which your income is paid and out of which the expenses of your business are paid. You can also settle a business credit card account from this business bank account. As a self-employed person it is advisable to maintain separate personal and business bank accounts.

You should keep all the records of your business for at least 6 years. These will include bank statements / credit card statements, copies of supplier bills and receipts, your invoices to your customers and copies of all legal agreements entered into for business purposes. There are additional rules for maintaining VAT records if your business is registered for VAT.