Love Island, the British summer TV hit, has traditionally been an influencer accelerator for the contestants that enter the villa each year. As their social following increases exponentially, more brands will be looking to work with the Islanders, but it’s not always smooth sailing with a number of financial and tax considerations that need to be made. Read our top tips for new influencers to avoid any financial complexity.
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 is 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 those clothes.
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 clients goals.
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!
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.
Find out more about our work with influencers.