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Do YouTubers pay taxes?

  • 4 min read
  • 17 Jan 2022
Do youtubers pay tax?

Do YouTubers pay taxes?’ Let’s face it – we’ve all wondered at some point!

YouTube offers a cool, new way for content creators to share their content!

If your Youtube channel is popular and doing well enough to make you some extra cash, then chances are it’s not just your subscribers that’ll notice. 

HMRC may very well be interested in knowing how much money you’re making from your YouTube channel.

Why?

YouTube creators can generate steady income from their channel. And the income made from advertising revenue, streaming donations, channel memberships and merchandise, just like most other income, is taxable. 

HMRC no longer class Youtube as ‘just a hobby’, so any money you earn from your YouTube channel must be declared through a Self Assessment tax return.

I’m a Youtuber, do I need to pay taxes?

If you’re a UK resident and you’ve made money through Youtube, then yes, you’ll probably need to pay tax.

HMRC is very strict when it comes to what it classifies as taxable income. If you don’t declare how much money you’ve made from Youtube, you may be investigated and even receive a hefty fine!

That’s why it’s very important that you know exactly what you’ve earned, and how you’ve earned it. Keep copies of invoices, bank statements and business receipts so HMRC can work out exactly how much tax you owe through your Self Assessment tax return.

Personal Allowances

The amount of Income Tax you’ll pay as a Youtuber depends on how much of your income is above the Personal Allowance of £12,570. This is the tax-free income everyone in the UK is entitled to receive each year.

There are a few things that can decrease your Personal Allowance. For example, if you earn over £100,000:

  • Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000
  • This means that you lose this allowance entirely if your income is £125,140 or above.

However, you can reduce your adjusted net income by paying into private pensions and charity donations.

But, Youtube is just my side-gig!

If you just use Youtube to make a bit of extra cash alongside your main job, do you need to pay tax on it?

The Youtube Partner programme means any content creator with over 1,000 subscribers can monetize their content – so if you do make money from YouTube, you will be liable for tax.

YouTube does not withhold taxes, so tax is not pre-deducted from income earned from your channel, unlike the money you receive from PAYE employment, so you’re solely responsible for paying tax on any earnings you make. 

There’s a lot of confusion around the Personal Allowance for when you have more than one source of income. People often think that the £12,570 figure applies to every different job they might have, but that’s not true! 

Here’s an example that should clear things up:

  • Let’s say you’re employed part-time as a retail assistant. You earn £9,000 a year from this job
  • In your spare time, you run a Youtube make-up tutorial channel. It’s very popular and in 2021/22 you make £10,000 from advertising revenue
  • In the eyes of HMRC you will have earnt £19,000 overall, which is over the Personal Allowance threshold and therefore, taxable

Work out your own tax with the TaxScouts calculator.

How do Youtubers pay taxes?

As a Youtuber, you’ll pay taxes on any money you’ve made through a Self Assessment tax return. And you have to do a tax return if you earn more than £1,000 per tax year. 

Remember that the margin for error is pretty slim with HMRC, so getting help in filing this can be worthwhile. You can choose to either:

  • Do your tax return yourself via HMRC
  • Pay an accountant to help you with it
  • Use smarter, cheaper online services from tax professionals such as TaxScouts – (we also provide all the tax information and advice you need!)

If you’ve never done a tax return before, you’ll need to register for Self Assessment first. You should do this by 5th October in any given year. 

When it comes to actually paying your tax return, you should do this by 31st January the year after the tax year you’re paying for. So if you’re paying your 2020/2021 tax return, this should be paid by 31st January 2022.

Trading Allowance

If you’re a Youtuber alongside your full-time job, you can make the most of the Trading Allowance which allows you to earn up to £1,000 additional income tax-free. Beyond this, you must do a tax return at the usual rates of Income Tax and National Insurance.

Can I claim any money back?

Yes! One of the benefits of filing a tax return is that you can claim tax back on some of the things you may have purchased for your Youtube channel. But be aware that you can only do this if you don’t claim the Trading Allowance. 

As long as you can prove that the expenses that you’re claiming are ‘wholly and exclusively’ for your YouTube business, then they are tax deductible. So remember to keep your receipts!

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