A Guide to VAT Compliance for Influencers

by Jane Deeks | Sep 16, 2025 | News, VAT & Online trading, VAT

A Guide to VAT Compliance for Influencers with Sudden Income Spikes

The world of influencers moves fast, one viral post can turn a side hustle into a six-figure business overnight. But sudden jumps in income bring tax and VAT obligations that can’t be ignored. This guide explains when VAT registration is triggered, what income counts towards the threshold, and how to stay compliant while keeping creative work the priority.

Why Influencers Need to Think About VAT

Influencers earn from many sources: brand collaborations, sponsored content, affiliate links, merchandise sales, digital products, event appearances, and more. Individually, these may not seem huge but combined, they can push VAT-taxable turnover over the registration threshold.

For 2025, the VAT registration threshold is £90,000 in any rolling 12-month period. This is not per tax year, it’s calculated on the last 12 months of business activity, no matter when the start date is. If total taxable turnover exceeds this figure, the business must register for VAT.

Also if there is an expectation that the £90,000 may be exceeded in the next 30 days alone. You have to register by the end of that 30-day period. Your effective date of registration is the date you realised, not the date your turnover went over the threshold.

Sudden Spikes in Income

Many influencers see their earnings grow gradually. Others experience sudden jumps such as a viral campaign, a big brand deal, or a surge in merchandise sales after a trending post. HMRC doesn’t consider how the growth happened only when the turnover crosses the threshold.

Example:

• January – August: £45,000 turnover.
• September: £50,000 brand partnership payment.

The rolling 12-month total is now £95,000. The VAT threshold has been exceeded and registration must be completed within 30 days of the end of the month in which the threshold was crossed.

What Counts Towards the VAT Threshold

The value of all VAT-taxable supplies must be included, even if charged at 0% VAT (zero-rated). For influencers, this often includes:

• Sponsored social media posts and campaigns
• Affiliate marketing income
• Sale of goods such as merchandise or books
• Sale of digital products like courses, e-books, or presets
• Appearance fees, event speaking, and hosting

It does not include genuine gifts with no obligation to promote, or payments outside the scope of VAT such as certain grants or personal gifts.

Are You Ready to Handle VAT When Income Spikes?

If earnings jump unexpectedly, is there confidence in spotting the moment the VAT threshold is crossed? Questions that need answering include:

• Is turnover tracked each month to monitor when the £90,000 threshold is close?
• Is there an understanding of the exact date the VAT registration clock starts ticking?
• Which VAT scheme would be most efficient for the business model?
• Will invoices meet HMRC’s legal requirements?
• Has the impact of VAT on pricing and profits been considered?

Getting these right can be the difference between smooth compliance and an expensive HMRC headache.

Through ETC Tax, the team works with influencers and fast-growing businesses to:

• Monitor income and anticipate VAT registration deadlines.
• Recommend the most tax-efficient VAT scheme for each situation.
• Guide businesses through the registration process from start to finish.
• Ensure invoicing and pricing strategies remain profitable and compliant.

Common VAT Pitfalls for Influencers

• Ignoring foreign income rules – services supplied to overseas clients may have different VAT treatments.
• Barter deals and gifted goods – valuable items in exchange for promotion may be taxable at market value.
• Late registration – can lead to backdated VAT bills, interest, and penalties.
• Not setting aside VAT funds – VAT collected is owed to HMRC, not available to spend.

Why Professional Advice Matters

VAT for influencers can be more complex than it appears. Brand collaborations may cross borders, digital product sales can have special place-of-supply rules, and income streams may involve mixed rates. Engaging a VAT specialist early helps to:

• Choose the most efficient VAT scheme
• Avoid unexpected VAT bills on international sales
• Keep compliant records for HMRC

A viral moment can change a career but it can also trigger VAT obligations almost overnight. Staying aware of the threshold, knowing what income counts, and acting quickly can prevent penalties and cash flow shocks.

For influencers experiencing rapid growth, ETC Tax can provide the guidance needed to register, manage VAT across multiple income streams, and maintain compliance while focusing on creative output, get in touch today.