Some people think accountants are just for old-fashioned, traditional businesses. But that's simply not true! Accountants can help all sorts of self-employed people and small businesses understand the complicated UK tax system. So should social media influencers get an accountant?

Many influencers today use professional accountancy services to handle their finances. While it isn't legally necessary for an influencer to have an accountant, it can save you time and energy and enable you to keep as much of your earnings as possible after tax.

In this article, we will explore the various services provided by a professional accounting firm, such as Capture Accounting, for social media influencers. We specialise in assisting influencers and content creators with their financial management needs while also providing tangible benefits that add value to their business.

Feel free to message us for more details and to book a callback.

Why do influencers need an accountant?

If you are an influencer starting to generate income from your social media channels, then you are required to register with HMRC, complete a self-assessment tax return and pay tax each year.

If you are new to the world of accounts and tax, then this can be a daunting prospect.

Rather than stressing over your accounts, it's well worth reaching out to financial professionals, such as Capture Accounting, for help. Our range of tailored accounting services for the influencer community can benefit you and your business in so many ways. Here are our top 5 reasons you should consider hiring a specialist accountant.

Benefits of using an accountant

1) A valuable safety net

When it comes to your tax obligations, having the safety net of an accountant gives you valuable peace of mind, helping to minimise the risk of mistakes and being fined by HMRC.

As accountants, we have a lot of experience dealing with HMRC, and we can take care of all of the boring form-filling and correspondence on your behalf. You can rest easy knowing that your taxes are submitted accurately and on time - without having to deal with staying on hold for hours waiting for the HMRC call centre to answer!

2) Save time and energy

Running your own business as a social media influencer involves dedicating a great deal of time and effort towards creating great content.

Little wonder then that other (less fulfilling) tasks, such as bookkeeping and tax returns, can fall by the wayside.

This is where an accounting team can be of great benefit. They can help you to establish good accounting habits, provide valuable advice and deal with your tax obligations, freeing up time for you to focus on content creation.

3) Build your business

Influencers and content creators can make big money these days. If you are ambitious and want to expand your influencer business, your accountant can provide valuable support.

They can help you streamline your accounting so that you have sight of essential financial information, such as cash flow forecasts and management reports, which you can use to make strategic decisions. For example we regularly help creators make decisions around whether they can hire a full time employee, invest in equipment, take on a sponsorship - all this comes from having good financial data.

4) Achieving your personal goals

We can also help you with planning big purchases like buying a house or car. We get to know what your goals are, and if that involves buying a house or investing in property, then we can work with you to make that happen.

When you're self-employed or trading through a limited company, there are quite a few hoops to jump through when it comes to getting a mortgage, so we offer advice to all our clients who are looking to buy their dream home and have partners in financial services that can help deal with the specific nuances of content creators.

5) A trusted partner

We can act as a valuable sounding board if you need advice on things such as raising capital, investments, banking, mortgages and anything else to do with your finances.

Think of us as your on-demand, trusted advisor who understands your business and has your best interests at heart.

Capture Accounting is always on hand to liaise with other professionals, such as mortgage providers, to give you peace of mind and save you from having to explain how influencers work time and time again!

When should I get an accountant?

As to when to hire an accountant, it's really down to your individual circumstances. The main two aspects to consider are your time and budget.

Do you find yourself constantly overworking, stressing yourself out and struggling with the tax side of things? In terms of income, are you at the stage you can reasonably afford to hire an accountant?

It may well be that an accountant would effectively pay for themselves by helping to identify tax deductions.

It also depends on your business structure and what stage you are on your business journey.

Getting an accountant as an sole trader

When you start earning money online from influencing, you should register with HMRC when your income reaches around £1,000. You are then considered a sole trader, and you must pay taxes after you exceed your personal allowance of £12,570 per year.

For new sole traders, managing accounts independently may be cost-effective, with professional help yearly for tax returns.

As your income and brand grow, it may well be worth investing in accountancy services to free up your time to focus on building your business.

It's also worth hiring an accountant at this stage to help you make the transition to a limited company.

The real question is not really of size but of ambition.

If you are creating content and building your brand just as a hobby and not expecting it to earn a living for you, then maybe you can handle your tax return and accounts.

But if you are looking to build a real business, a personal brand, or a community and develop products, then having an accountant on board early is essential.

Getting an accountant as a limited company

If your business starts to generate more than £40k per year, then it may be more tax-efficient for you to register as a limited company. Another big advantage of limited companies over sole traders is that the business owner has limited liability, meaning that they have no personal responsibility for the businesses' debts.

Your accountant can help you decide when the time is right and talk you through the pros and cons of each business structure.

They can also advise whether it's advantageous to register for VAT, to claim back VAT on expenses. They will also help you avoid traps and stay compliant with rules on selling digital products into the EU. Running your business through a limited company comes with quite a few legal responsibilities - unless you're a trained accountants it's best to engage an accountant to manage the various compliance obligations for the company to avoid risking penalties and even jail in extreme circumstances!

To learn more about your VAT responsibilities as an influencer, check out our blog.

What accounting services does an influencer need?

An accounting firm such as Capture can offer a wide range of services tailored to your needs. Here are some of the more common services we provide to our influencer clients.

Bookkeeping

Bookkeeping is a day-to-day chore that we can take off your hands. We live and breathe accounts all day and can help you spot things that you wouldn't be aware of without the proper training and experience.

We can also help you to set up your accounts using the latest cloud-based accounting software and provide you with an app to zap your receipts and forward your invoices so you don't have to do anything yourself in the software (although software is great, it still needs an understanding of accounting to make sure everything's in the right place).

Tax and VAT affairs

Expert tax advice is perhaps the most valuable service an accountant can offer an influencer. There is so much legislation around tax and rigorous processes to follow which we can help you to understand without hours of research.

We can actively save you money with professional advice on tax deductions you are entitled to. We will also help you avoid penalties due to errors like late submission and not declaring gifts, which may be taxable.

It's easy to think that the cash in your bank accounts is available at any time, but without proper financial planning, you may forget to save money for your tax or VAT bill. This is the most common compliant we here when creators come on board with us - that they are required to pay huge amounts of tax unexpectedly. This usually happens when your income goes up and either you are not aware of the tax you have to keep aside or your accountant isn't dialled into your business to keep you informed on a regular basis.

Having an accountant on board will ensure you are aware of your tax liabilities and help you to plan for your bill so you don't spend the money before it's due!

Payroll

If you begin to employ people, then you need to run a payroll by law. It's a complex and time-consuming job that is best handled by accountants.

They can do all the administration on your behalf if you wish and also ensure you are making the correct deductions, calculating income tax and National Insurance accurately, and that your employees are paid on time.

Claiming expenses

As an influencer, you are entitled to claim tax back on expenses, just as any other small business owner. The main caveat is that the purchase must be for business purposes only.

Expenses are deducted from your taxable income to reduce your final tax bill. Allowable expenses include things like travel, electrical equipment, gifts and even a proportion of your gas and electricity bill if you work from home.

It's essential, therefore, to keep detailed records of your expenses for tax purposes. Your accountant will ensure you log and claim your expenses accurately so you receive every penny you are due after tax.

Capture Accounting specialise in social media influencer accounting

If you have your own business as an influencer or content creator, then working with a specialist accountant like Capture Accounting can save you time, money and stress.

We understand your business and can easily identify which services you require depending on your circumstances. We offer an initial consultation with each prospective new client, then design an accounting package just for them.

Get in touch by completing our contact form, and we'll arrange a quick 30-minute Zoom call to see if we are a good fit for your business.

Conclusion

So, do social influencers and content creators really need an accountant? Legally, no, but if your circumstances allow for it, then it can reduce your workload, save you stress, keep you compliant and help you plan your financial future.

Having an accountant can help you focus on creating content and growing your brand without having to stress about your taxes. In addition, we can be on hand to steer you in the right direction when it comes to making important financial decisions.

Fundamentally, if you're an ambitious online content creator and want to grow a successful business, then having an accountant on board who understands your industry is essential.

FAQs asked about influencer accounting

Can an accountant file my self-assessment tax returns?

Yes, many influencers hire accountants to file their self-assessment tax returns. Your accountant will ensure that all relevant income, expenses, and deductions are accurately accounted for, maximising your tax efficiency and compliance with tax regulations.

How often should you see your accountant?

The frequency of meetings with your accountant depends on your business needs. However, Capture recommends scheduling regular check-ins throughout the year to stay on top of your financial situation. For influencers and content creators, quarterly or semi-annual meetings are often beneficial.

At Capture we have an unlimited access policy - meaning you can call, WhatsApp or email us at any time without extra charge (unlike many accountants who charge by the hour!).