For many of us, blogging started off as a hobby and then, as we discovered that it IS possible to make a decent income from a blog, we also discovered that Her Majesty’s Revenue and Customs (HMRC ) is also very interested to know the in’s and out’s of our sponsored posts, affiliate payments and brand collaborations. But tax advice for bloggers seems very thin on the ground, doesn’t it?
You may think that you don’t need to declare any income from your blog until you reach a certain financial threshold. But, don’t labour under that misconception. Whether blogging is your only source of income, or whether you are holding down paid employment as well, you are required to declare every penny of your blogging income as soon as you start earning.
Tax advice for bloggers
The simplest thing to do is to contact HMRC to register as Self Employed and report your earnings on a Self Assessment Tax Return. You can also register on the HMRC website.
If you already have a job and are not earning very much from your blog, you should still tell them as they may simply adjust your tax code.
Your application will generally take 10 days to process after which HMRC will send you a UTR number (Unique Taxpayers Reference) by post. Make sure you hang on to this because you will need your UTR number to file your tax return.
I have also been asked to supply my UTR number before being accepted for some brand collaborations in order to reassure them that they are working with a properly organised business.
So, throughout the tax year (which runs from 6th April to 5th April), you will need to record all your blogging income and expenditure. Make sure you keep any receipts too. Note that you are paying tax a year behind, so in January 2019, I’ll be submitting a tax return for 6 April 2017 to 5 April 2018.
You will then have to complete a Self Assessment Tax Return by the deadline date of 31 January (if you are completing it online) or by 31 October (if you are completing a paper copy).
The Self Assessment Tax Return form summarises your blog income and expenses and on submission, you will then be billed for any tax you have accrued and National Insurance payments if you have earned over a certain threshold.
Your tax bill must be paid by 31 January each year or you will be fined.
You might think there’s no hurry to register and take the view that giving it a few months whilst your income is still negligible won’t hurt but HMRC is clear that you must register as self-employed as soon as your blog has become more than a hobby – and in any case by the 5th of October in your blog’s second tax year.
Which takes us to the question of what you can claim as expenses. You’ll find the full list on the HMRC website here.
To give you some examples, though, you can claim for items such as:-
- web hosting fees and domain name registration
- ebooks or e-courses purchased to help grow your business
- travel to events such as blogging conferences
- equipment purchased to help run your business e.g. a laptop
- Paypal fees
Check the HMRC website though to make doubly sure that you can claim your purchases as legitimate business expenses before you spend your hard-earned blogging income on them.
If you earn more than the Standard Personal Tax Allowance which is £11,500 for 2017/2018 and will be £11,850 for 2018/2019, then you are required to pay 20% of what you earn over that amount minus your allowable expenses, in tax.
In addition, if your annual profits are over £6205 you’ll need to pay Class 2 National Insurance Contributions of £2.80 per week (£2.95 for tax year 2018/19). Below this, you can opt not to pay or volunteer to make Class 2 contributions.
I think it’s important to note here that I am not an accountant and, like most self-employed people I am learning as I go – and making frequent phone calls to the behemoth that is HMRC in the process. It’s just one of the additional chores involved in working from home.
This means often enduring incredibly long telephone queues and answering enough questions for an edition of Who Wants To Be A Millionaire (with the unfortunate result that you pay HMRC rather than the other way around). But I’d rather be sure. HMRC is still the best source for tax advice for bloggers – and it’s free.
If you find the whole rigmarole of finding the right telephone numbers for the various HMRC departments a chore, I’ve found a rather nifty website called Talk Tax which lists the main telephone numbers of HMRC departments such as pensions, tax, benefits and employment. Note that there is a charge of 7p per minute and a connection charge before you call.
Talk Tax also offers a range of helpful and easy to understand guides – for example, what to do if you lose your UTR number, want to cancel your road tax or need help with childcare.
Dealing with HMRC can be daunting but it is important to get your tax affairs in order and to start recording your income and expenditure as soon as you think your blog is going to be a business.
There are loads of software packages you could invest in to help you with your bookkeeping but I use Microsoft Excel spreadsheets and am judicious in starting every morning with a quick overview of what’s come in and gone out of my bank account.
I compare the monthly financial performance of my blog against the same period during the previous financial years which allows me to decide where my energies are best spent.
Should I mail my contact list to see if there are any sponsored post opportunities? Do I need to ramp up my affiliate marketing? Can I, in fact, take some time out for routine admin such as improving the SEO of my posts or creating new post pins for Pinterest?
When I was a marketing director, I always used to remind the lawyers that marketing is all about anticipating and satisfying customer needs whilst making a profit.
There is no point, is there, in blithely subscribing to an expensive social media automation platform (e.g. Edgar), signing up for every e-course going and buying yourself a top of the range Mac if you are not making any money.
Every blogger, I think, should have a healthy working knowledge of their blog’s finances to help make the best decision about how to use their time and where to invest their income to generate greater reader satisfaction, more engagement and hopefully more traffic.
Nobody WANTS to pay tax but by keeping an eye on your income and expenditure, you’ll be in a far stronger position to make sensible business decisions. That’s almost worth hanging on the phone to HMRC for.