HOW TO FILE YOUR TAXES AS A BLOGGER | UK

Have you completed your self-assessment yet? Do you even know how to file your taxes as a blogger in the UK? These are the questions I asked myself many years ago when I started earning money from this side hustle aka blogging. I knew already from my mother who runs a couple of side hustles but I did not realise how complicated it can all be when you have to file for your taxes for the first time.

I started this blog back in 2013 and did not start earning money (like $20) until a year later but it wasn’t until about 2015 when I submitted my first ever self-assessment (which I did all wrong and had to pay tax when I shouldn’t have). Since then I hired my father who was a banker and has experience to file my self-assessment and will not be attempting to file them myself anytime soon because I get headaches.

*Disclaimer – I am not an accountant or financial advisor, tips shared in this post are 100% my own opinion based on current research*

HOW TO FILE YOUR TAXES AS A BLOGGER

When I started blogging, I did not know that as a blogger, there are certain legal guidelines that I needed to follow in order to be compliant with UK law. I am thankful to a lot of Facebook groups where bloggers share personal blogging experiences and we are all able to learn from them and I hope I am sharing that information forward. When it comes to learning how to file your taxes as a blogger, I only knew I had to from a fellow blogger. I did not think as a blogger I would be classified as a sole-trader or self-employed and did not think I earned enough to be taxed on.

As mentioned, I learned from other bloggers that if you earn money from your side hustle, you should register with the HMRC in the UK. I learned that on your first £1000, you don’t pay tax on it but you still have to complete a self-assessment. Filing taxes is one of the most stressful things ever but it doesn’t have to be, you can hire an accountant to do it for you or maybe watch on YouTube and learn from other people who do it all the time. But remember, if you make a mistake, you will have to pay for that mistake in the long run so I recommend hiring an accountant or someone who knows what they are doing.

So, in this post I will share some tips on how to file your taxes as a blogger, an influencer or whatever you call yourself. For many of us blogging started out as a hobby but over the years has grown and we make passive income from it. Because we are earning money from the blog or social media, you have to declare that to the HMRC and file you self assessment every year.

Keep Track of your Earnings and Expenses

As a budgeter, this is something I am glad to say I started from the beginning of my blog, again it’s something I learned pretty early on. Whether your earnings are paid directly into your bank or via another payment system, make sure you can track all the money you make. Until recently, I used to use an excel tracker where I recorded every payment I had sent and received. Now I use Xero together with PayPal to tracker all my earnings that I make.

When it comes to expenses, I made sure to open a business account with Monzo and use that to make any business purchases instead of my normal account. This way I know ALL the expenses showing up on my business account statement are those that I can claim back as tax allowances. If you don’t have a business account created separately for your business then track everything with PayPal/Quickbooks or use a tracker and record every expense.

Deduct 20% from every Sale for Tax

Everyone in the UK (who works) is entitled to a personal allowance which changes every single year and the last tax year (April-2019 thru April-2020) the personal tax allowance was about £11,000. Personal allowance in layman’s term is the amount of money that is yours and isn’t taxable so if you earn £30K a year, they remove £11k and £19k is what they tax you on at 20%. The amount of tax you pay increases depending on what’s left once personal allowance is deducted. If you are both self-employed and employed like I am, you pay a little lot more tax especially if you pass a certain threshold.

As a rule of thumb, I deduct 20% from every earning I make on my blog, so for example, I charge £125 per post I then deduct 20% which is £25 and move that to my tax pot. Sometimes I save a little bit more (like 40%) because you are expected to pay at least 20% tax on your earnings. If you earnings from the blog surpass a certain threshold then you will have to pay a higher tax. There is also national insurance contributions which can be either class 2 (earnings below £6000) or class 4 (earnings above £8000 but below £43000) depending on your earnings. It is so important to stay clued up on what taxes need to be paid and keeping the correct documentation is key.

Know what you can claim

As someone who is self-employed, there is an extensive list of allowable expenses that you can calm on the HMRC website. The items I list below are not extensive but are some of the items you can claim as expenses for your business.

• Laptop – I use my laptop for blogging so this is a business expense, for personal things I normally use my iPad.
• Web hosting – this is a business expense
• SEO costs – again this is a business expense so if you have a paid version of Yoast, that’s an expense
• Camera equipment – bought mainly for blogging purposes
• Stationery – I use at blogging conferences or even just taking notes as I research a blog topic

Please don’t just take my word for it, check out the HMRC website on what you can claim.

What else should you know?

• Keep all your receipts (even the PayPal invoices) and create an expense tracker
• You pay taxes a year behind, so the Apr-2019 thru to Apr-2020 is due 31-Jan-2021
• Hire an accountant, it can be expensive but worth the money in my opinion otherwise, learn how to file your own taxes or use a certified software
• Don’t forget to save for your national insurance contributions
• Claim a percentage of your home bills (mobile phone, broadband etc)
• Always watch the clock, don’t wait until 31-Jan to file your taxes

I have covered all the basics but the bottom line is, if you are earning money from your side hustle, you need to register (self employed, limited company, partnership) with the HMRC. You need to complete a self-assessment (online is easier and faster than paper), if its confusing either learn or hire an accountant. Of late the HMRC has certified some cloud based softwares (think Quickbooks) which you can use to help you submit you taxes and track your expenses. Know what you are liable for before you find yourself with a huge bill..