With over 190 million registered users and 2.1 million artists who have collected $12.5 billion in payouts as of 2023, OnlyFans is one of the top 50 websites in the world in terms of daily visitor traffic. There are also individuals (influencers) who are not just making ends meet through certain social media platforms, like Facebook, Instagram, or YouTube, but living a dream life.
If you are fortunate enough to be one of these individuals, it is critical to understand that this is taxable income. This implies you’ll must register as self-employed and file your content creator taxes as an annual self-assessment tax return.
If you have received an HMRC tax letter regarding your OnlyFans or content creation revenue from social media platforms, you must understand the ramifications and take proper action.
This blog will help you understand OnlyFans and Influencers tax implications in the UK.
- What are Self-Assessment and Tax Returns?
Self Assessment Tax is the money you pay on your earnings after subtracting Advance Tax and TDS for the specific financial year. If you need to file your income tax returns, you have to pay your Self Assessment Tax in advance.
- How do you determine if you have income from only fan pages and creating content on Other digital platforms?
Understanding how OnlyFans management and social media influencers generate revenue is critical for efficient financial management.
OnlyFans Income: OnlyFans Management allows you to make money through Subscriber fees, paid messaging, tips, pay-per-view (PPV) content, and referral bonuses. Please keep track of your revenue sources and analyze them on a regular basis to maximize your earning potential.
Social Media Influencers: If you’re a content creator on different platforms like YouTube, Instagram, TikTok, or any other social media platform then you can earn through a dedicated partner program wherein advertisements will run on your videos, and you make money through the number of views. Affiliate links, subscription programs, and brand sponsorships also count in your social media income sources.
- Is OnlyFans Classed as Self-Employed?
Yes, if you work with an OnlyFans management company, you’re not hired by the company as an employee; instead, you are working as a self-employed individual through that agency. Therefore, you are considered self-employed, and your income is taxable beyond £12,750.
- What do you do upon receiving a letter from HMRC?
If you get an HMRC tax letter, it’s important to reply by the date mentioned in the letter, usually within 30 days. You still need to respond even if you didn’t earn any money.
HMRC knows you might have made money from creating content online, and they got this info from other sources. They think you might not have told them about all your income, and this could mean your tax info is wrong or you might not have paid enough tax.
If you filled out tax forms before:
Check your previous tax forms to make sure they’re accurate. Look at all the money you made from creating content online, and make sure you subtracted any costs you had. The only exception is if all your income from content creation and other work is within the £1,000 allowance.
Remember to include all your taxable income on your tax form, like money from a job if you have one.
If you have never filled out tax forms before:
Check if you need to tell HMRC about the money you made from creating online content. If your income from content creation (and any other work) is within the £1,000 allowance, and you don’t have to do a tax form for another reason, you might not need to tell them.
- What Steps do you take if you have income to report to HMRC?
After receiving a letter from HRMC, you must promptly tell the authorities that you must submit a personal tax return, beginning with the tax year in which you started your content account.
They will provide you with a Unique Tax Reference number (UTR) required to file your taxes. Prompt notification to HMRC of your intent to file can lead to leniency on fines for missed deadlines, highlighting your commitment to tax compliance.
If you’ve previously enrolled for Self-Assessment but have yet to reveal your income, you can change your return filing.
If you do not regularly file a tax return, you can register for Self-Assessment to report any income you have not paid taxes on for the previous four years. You will need to file a separate tax return for each year. You can file your self-assessment tax with the help of an expert accountant for self-employed individuals.
- Does OnlyFans Report to HMRC?
HMRC allows you to make £1,000 tax-free income through OnlyFans management company. If you earn beyond this amount, you are supposed to report your income to HMRC. OnlyFans agency does not report your income to HMRC whatsoever.
- After acknowledging undeclared income to HMRC, what is the deadline to pay the owed tax?
If you wish to file your unpaid content creator taxes to HMRC, you must do it before the tax year ends on April 5. Anybody who is obliged to file a tax return will receive a notification immediately after that informing them that they must file a tax return for the previous tax year. If you are new to self-employment, you must first register with HMRC for tax and national insurance (NIC). An experienced account for self-employed individuals can help with tax return filings.
- What are the Consequences of Not Filing Tax Returns?
Failure to file OnlyFans or influencers tax even after receiving a letter from HRMC is considered tax evasion and unlawful. Failure to file can result in penalties, as well as, interest can be levied on unpaid tax. Every late-filed return receives an automatic £100 penalty. If it is more than three months late, a fee of £10 a day is levied until it is submitted.
If you are more than six months late on your self-employed tax from OnlyFans, Facebook, Instagram, or any other social media platform, you will be charged an additional amount of £300 or 5% of the tax owed, whichever is greater, and if you are more than twelve months late, the same penalty will apply.
So, if you owed £1,000 influencer or OnlyFans UK tax and were a year late, you would owe a total of £2,600 in fines, plus any interest HMRC chooses to apply on the sums owed.
Filing OnlyFans & Influencers Taxes with Cangaf Accountants
Managing finances involves intricate paperwork and legalities. At Cangaf Accountants, we have a dedicated team of accountants for self-employed individuals to handle the tedious aspects, allowing you to focus on your business. We understand the taxation challenges of influencers and content creators; therefore, we are here to assist you. Our services cover everything, from self-employment registration to guiding you through self-assessment and filing with HMRC.
We provide you with a dedicated account manager who will take care of your self-assessment tax matters and offer unlimited support. You will get access to a secured client portal to upload all your documents for filing tax returns. Last but not least, we’ll serve as tax representatives to interact with HMRC on your behalf.
Contact us today!
