Introduction
As a UK influencer or content creator, your business incurs numerous expenses, from travel to equipment purchases. Fortunately, HMRC allows you to claim many of these costs as deductions, reducing your taxable income. This guide breaks down what expenses you can claim, how to track them, and common mistakes to avoid.
By the end of this article, you’ll have a clear understanding of how to keep more of your hard-earned money while staying compliant with UK tax laws.
1. What Are Work-Related Expenses?
Work-related expenses are costs incurred wholly and exclusively for your business. These expenses directly support your ability to generate income as an influencer or creator.
Examples include:
- Equipment like cameras or microphones.
- Travel to brand events or collaborations.
- Subscriptions to editing software or marketing tools.
Important: If an expense has both business and personal use (e.g., your phone or car), only the business portion can be claimed.
2. Categories of Work-Related Expenses
a. Equipment and Tools
Investments in equipment are often some of the largest expenses for influencers. HMRC allows deductions for:
- Cameras, lenses, and accessories.
- Editing laptops or PCs.
- Lighting, tripods, and stabilizers.
- Sound equipment, such as microphones or headphones.
Pro Tip: For high-value items, consider using Annual Investment Allowance (AIA) to claim the full cost in the year of purchase or spread it over several years through depreciation.
b. Home Office Expenses
If you create content from home, you can claim a portion of household costs, including:
- Rent or mortgage interest.
- Utility bills (electricity, water, heating).
- Internet and phone usage.
You have two options:
- Simplified Flat Rate: HMRC allows a fixed monthly deduction based on hours worked at home.
- Actual Costs: Deduct the percentage of costs based on the size of your home office relative to your house.
c. Travel Expenses
Travel costs for business purposes are deductible, including:
- Train or bus tickets for meetings or events.
- Mileage for personal vehicle use (claim 45p per mile for the first 10,000 miles and 25p thereafter).
- Taxis or ride-sharing services for business travel.
- Accommodation and meals for overnight trips.
Exclusions: Regular commuting to a fixed place of work is not deductible.
d. Marketing and Advertising
Promoting your content is a crucial part of your business. Allowable marketing expenses include:
- Paid social media advertising campaigns.
- Designing and printing business cards or promotional materials.
- Subscriptions to marketing tools like Canva or Hootsuite.
e. Professional Services
Hiring external professionals to assist your business is also tax-deductible:
- Accountants and bookkeepers for managing finances.
- Legal advisors for contract reviews.
- Freelancers or agencies for content creation support, like video editing or photography.
f. Subscriptions and Software
Any subscription services essential to your business can be claimed, such as:
- Adobe Creative Cloud or Final Cut Pro for video editing.
- Stock photo and music libraries.
- Cloud storage platforms like Google Drive or Dropbox.
3. How to Track Work-Related Expenses
Proper tracking ensures you can claim the maximum allowable deductions without errors.
Step 1: Keep All Receipts
Save physical and digital copies of receipts for every expense. Use apps like Expensify or Dext to digitize and organize them.
Step 2: Use a Business Bank Account
Separate business and personal finances to simplify expense tracking and improve accuracy.
Step 3: Categorize Expenses
Divide your expenses into clear categories, such as travel, equipment, and subscriptions, to make tax filing easier.
Step 4: Use Accounting Software
Tools like QuickBooks or Xero help automate expense tracking, categorize transactions, and generate financial reports.
4. Common Mistakes to Avoid
a. Mixing Business and Personal Expenses
Expenses with mixed use, like your mobile phone, must be divided proportionally. Claiming the entire amount could result in HMRC penalties.
b. Forgetting to Track Mileage
Keep a detailed log of your mileage for every business trip, including the date, purpose, and distance.
c. Overlooking Small Expenses
Small costs, like parking fees or subscriptions, can add up over the year. Track everything to maximize your deductions.
d. Not Retaining Receipts
HMRC requires proof for every claim. Without receipts, even legitimate expenses may be disallowed.
5. How to Include Expenses in Your Tax Return
When completing your self-assessment tax return:
- Navigate to the “Business Expenses” section.
- Enter total amounts for each category of expense.
- Use HMRC-approved software to ensure accuracy and compliance.
Tip: Hiring an accountant can help ensure all deductions are correctly applied, potentially saving you more than their fee.
6. The Benefits of Claiming Expenses
- Reduce Taxable Income: Deducting expenses lowers your overall profit, reducing your tax bill.
- Improve Cash Flow: Saving on taxes means you can reinvest in your business.
- Stay Compliant: Proper tracking and reporting keep you on the right side of HMRC regulations.
Conclusion
Claiming work-related expenses is a powerful tool for UK influencers to manage their finances effectively. By understanding what you can deduct and keeping detailed records, you can significantly reduce your tax liability and focus on growing your brand.
Not sure how to track and claim your expenses? Let Capshine handle the details, so you can focus on creating great content.