Monday night’s Love Island finale introduces a host of new influencers to the social scene – Here’s what they need to know about managing their new finances
As the villa doors close for another summer on the reality TV sensation Love Island, the door to influencer society will open for many of the contestants. As their social following increases exponentially, more brands will be looking to work with the islanders. However, it’s not always smooth sailing – there are a number of financial and tax considerations that need to be made. Andrew Subramaniam, Partner and Head of HW Fisher’s authors and journalists team shares his four finance tips for new influencers:
1. Beware of the “freebies” or “gifting”
Despite the name, freebies might not be as straightforward a transaction as you think. If you receive an item as a gift from a company and there is a contractual obligation to post about it, HMRC will seek to tax you on the market value of the item which, depending on the brand, could really mount up. Clothing and accessories are a particular area of focus for brands and influencers, but to treat this as an allowable expense you have to be able to evidence that this is for on screen use only. Which means you could run into trouble if you are seen elsewhere in these items!
2. Get the right team in place
Most influencers are great at creating content but have little or no idea about the compliance minefield related to their activities and a good finance team will set you up for success. An accountant can make sure you have your taxes in order, a financial adviser will help your money work hard for you, and a lawyer can make sure you are aware of your legal obligations and check contracts to make sure you know everything you are signing up for. It is a real team effort, and everyone needs to work collectively to achieve the client’s goals.
3. Consider signing up to an agency
Most contestants have agencies before going into the Love Island villa these days, but a good agent should look at finding you deals and partnerships with brands that you want to work with when you come out. They will have a better idea of your true market value ensuring that you are not underselling your services and should keep a steady flow of work heading your way. They also tend to deal with all negotiations, contracts, invoicing and chasing brands for payments which can take up a lot of time!
4. Operating as a Limited Company
While operating as a sole trader is relatively straight forward, many influencers do operate via limited companies. While the paperwork related to operating a company is significantly more than that for a sole trader, the main reasons for this is that a company offers the influencer protection in the form of limited liability. This means that the company acts as a barrier between what the influencer owns personally and what is in the company. Professional advice should be sought here before deciding on which route to go down as no two cases are alike.
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