TikTok is a social media app widely popular for its short video format. It has been garnering quite some attention since its launch in 2016. While initially, the users were mostly individuals, today, the platform is also trending amongst businesses that use the platform for audience education, customer engagement, marketing and branding, and so on.
Currently, there are about 1.04 billion TikTok users worldwide. In the UK alone, it is estimated that there will be more than 16.8 million TikTok users by the end of 2024.
The social media platform has been responsible for generating substantial TikTok earnings in the UK for creators who either use it full-time or work on a freelance basis to create content. Such creators or influencers earn their livelihood and make income directly from the platform or from brands that they promote on the platform.
Keep reading to learn how influencers earn TikTok income and the taxes they are required to pay in the UK.
Who is a TikTok Influencer?
A TikTok influencer is a content creator on TikTok with 1,000+ followers. As per Emplifi, a TikTok influencer is “a user on social media who has established credibility through the videos they create and post on TikTok.” Due to their large following, the influencers can reach out to a larger audience. They create engaging videos to entertain followers and have subtle power to persuade them with their genuine views and ideas. In such cases, they often collaborate with brands for brand promotion and in exchange get paid.
On the other hand, TikTok influencers with a minimum of 10,000 followers get paid from the TikTok creator fund in the UK. Also, applicable conditions in such cases are at least 100,000 views on their videos in the past 30 days. The creator should also have a Pro Account.
Here’s a brief of different types of TikTok influencers:
| Influencer Type | Number of Followers |
| Nano Influencer | <50,000 followers |
| Micro-Influencer | 50,000 – 150,000 followers |
| Influencer | 150,000 – 500,000 followers |
| Macro Influencer | 500,000 – 1 million followers |
| Mega Influencer | > 1 million followers |
As per industry experts, the algorithms of TikTok are designed to elevate influencer positions vis-a-vis competing social media platforms like Instagram and YouTube. It is a crowded space and things could get competitive.
Becoming a TikTok Creator
- App Download: First, download the TikTok App on your smartphone.
- Registration: You start by registering an account. It is free. Provide your email ID and other personal details.
- Interest Selection: Choose from a list of interests to enable the algorithm to provide you with the content of your interest.
- Content Creation: Start by creating videos of your choice to attract the right followers.
Making Money as a TikTok Influencer
As a TikTok influencer, the more followers you have, the more money you can earn. This is because brands approach influencers with more followers for better market reach. You can make money even as a music producer if your music tops the charts in certain countries. Creators can sell their merchandise, or if you are a children’s entertainer, you can still earn money.
However, influencers can earn money in numerous ways.
- The TikTok Creator Fund in the UK
- The Creator Next is a part of the TikTok Creator Fund in the UK so that creators can have ready access to a network of gifts, tips, and brands.
- For TikTok income, you should be at least 18+ years old, have 10,000+ followers, have 100,000+ views in the preceding 30 days and have 3+ videos in the past month.
- Hootsuite estimates that as an influencer, you can earn between 2 to 4 cents per 1,000 views. Although, it’s not enough but it can become significant when you start to get millions of views regularly through Creator Next support.
- Payment by brands for product and service promotions
Some of the industries and brands will pay as per the campaigns of their product and services. As per Hub, the estimates for influencer marketing are –
| Influencer Type | Amount per post |
| Nano Influencers | $5–$25 (£4.32-£21.60) per post |
| Micro-Influencers | $25–$125 (£21.60-£107.90) per post |
| Macro Influencers | $1,250–$2,500 (£1,079-£2,157.90) per post |
| Mega Influencers | $2,500+ (£2,157.90+) per post |
- Receiving tips & gifts from followers
Getting tips and gifts can also add to TikTok earnings for influencers. Gifts are given live and were introduced towards the end of 2023. Tips are received directly from followers in the form of TikTok Diamonds and TikTok Coins. Tips up to $100 (£86) per transaction and $500 (£431) dollars per day are received.
- Affiliate Marketing
This is similar to being paid by brands in lieu of brand promotion. In this case, a discount link is offered to promote products. The more people click the link, the more money users make.
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- TikTok Pixel (Shopify)
People who have an e-commerce store or site can promote products and services via TikTok Pixel. This way, they can create customers out of TikTok users. You can manage TikTok ads from Shopify. You can also keep track on the sales, and user activity.
Am I required to pay tax? How do I pay tax?
HMRC will tax you on your TikTok earnings based on how much you earn every year from TikTok as well as from outside the social media platform.
Tax on TikTok income is as follows –
| Income brackets | Tax Return required or not |
| Less than £1,000 a year | No |
| More than £1,000 a year | Yes |
Earning more than £1,000 a year does not necessarily mean that tax is required to be paid. However, a tax return has to be submitted so that HMRC has all the information about your earnings and can start to tax you once the earnings start to increase.
If your earnings are more £12,570 in the tax year, you will need to pay tax. This is applicable if it is your business. However, if it is a hustle, the applicable tax implications may be different. You need to speak to professional consultants to understand the implications better.
For full-time TikTok influencers, tax will be levied as is the case with other self-employeds. Your TikTok earnings will be treated like that of a sole trader.
The bands are as follows –
| Band | Tax Percentage | TikTok Earnings |
| Tax Allowance | 0% | Between £0 and £12,570 |
| Basic Rate | 20% | Between £12,571 and £50,270 |
| Higher Rate | 40% | Between £50,271 and £150,000 |
| Additional Rate | 45% | Over £150,000 |
You will need to pay National Insurance on the TikTok earnings above £11,908 in a year.
If your earnings start to increase and your tax rate touches or goes beyond 45%, then it is fair to start a limited company. Once the limited company is formed, the corporate tax rate is 19%.
In other words, as long as you are taxed at the basic rate of 20%, it is recommended that you continue as a sole trader. This will help avoid certain admin-related and other costs associated with a limited company.
Also each year you will be required to complete the self-assessment tax return. The operating expenses will first be deducted from the tax bill. For online self-assessment, it should be completed by 31st January of each year. If the postal format is used, the last date of self-assessment is 31st October.
As a TikTok influencer, what are the expenses incurred?
There are different expenses or running costs that you need to incur to work as a TikToker. These expenses can be deducted from your taxable profit. The criteria is that these should be eligible expenses.
For example, if your earnings are £50,000 and your expenses are £10,000, the taxable income will be £40,000 annually. However, if you use a £1,000 tax-free trading allowance, claiming expenses is not allowed.
A content creator’s expenses are –
- Laptop or computer system.
- A camera
- Editing software
- Lights
- A phone
- Transportation costs if you are required to travel
- Props and set designs
- Other materials that a part of your content
Reach out to a Professional Accountant to Report Your TikTok Earnings Accurately
Whether you are a full-time or a part-time TikToker, your TikTok income is taxable based on your earnings. Remember, you are also required to complete the complex process of self-assessment. All of this can consume a lot of your time and can be quite challenging. If you need help, you can reach out to specialist accountants like Cangaf Ltd, who will make the process of reporting your TikTok income really smooth. Our accountants deal with HMRC on your behalf, allowing you to focus on your content creation journey.
