This year, tax season is causing some additional headaches for individuals who benefit from the burgeoning creator economy. Her Majesty’s Revenue and Customs (HMRC), the national tax agency of the United Kingdom, has announced its plan to crack down on earnings from “side hustles” like live shopping and affiliate marketing.
As reported by Bloomberg, the HMRC decree applies to individuals who made at least £1,000 ($1,244) from their secondary income sources. That threshold allows the British tax agency to target supplemental income from sources like eBay and Airbnb without punishing people who are hawking household items in small quantities.
To help taxpayers understand the new rules, HMRC has shared some “tax help for hustles” guides, including a dedicated primer for content creators. “Nobody wants an unexpected tax bill, so anyone with a side hustle should check HMRC’s straightforward guide and make sure they’re getting their tax right,” said Angela MacDonald, the deputy chief executive at HMRC.
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HMRC set up its new rules after a committee of MPs warned the agency that it is “vastly underestimating” the amount of income Brits owe in taxes. The explosion of the creator economy is one factor contributing to that widespread underreporting. Though many people now secure full-time earnings through social media-related revenue, the creator economy is still filled with hundreds of millions of part-timers who treat their digital careers as the sort of “side hustle” HMRC is targeting.
The rise of ecommerce within the creator economy makes questions about taxation even more complicated. During the 2024 holiday season, shoppable streams on platforms like TikTok gained popularity in the West. TikTok is looking to capitalize on that momentum by building a bigger ecommerce operation in the U.K. in 2025. As creator earnings skyrocket, there will be further questions about how much of that money goes to local and national governments.
Luckily, there are a number of platforms creators can turn to if they want to simplify the tax prep process. Companies like Karat and Creative Juice have supplied ample financial tools catered to the influencer class, and fintech startups like Cookie Finance and Boring Stuff recently put themselves on the map as well. Creators in the U.K. might want to give those solutions a peek, because HMRC looks determined to take in every shilling it’s owed.
