Taxman targets 400,000 freebie Instagram 'stars' – with £100 fines looming

Thousands of Brits who post pictures of their meals, makeup or holidays online risk being hit with surprise penalties from the taxman. HMRC is cracking down on so-called micro-influencers – social media users with as few as 1,000 followers – who accept gifts or cash in exchange for content.

Officials say that anything worth more than £1,000 in a year, whether it is payments or products such as clothing, gadgets or trips, must be declared. Those who fail to file a self-assessment return by January 31 face an automatic £100 fine.

The penalties escalate sharply: daily fines of £10 after three months, up to £900; then a 5% charge, or £300, after six months – with the same again if payment is still outstanding after a year.

While freebies under £50 given with no expectation of promotion are usually exempt, most commercial brand deals will count as taxable income.

Industry experts warn that around 400,000 would-be influencers in the UK could be affected, along with others earning a little extra on the side by selling through online marketplaces or dabbling in crypto.

Mitch Hahn, boss of specialist influencer accountants Nordens, said: “If you earn from influencing alongside other jobs, HMRC looks at total income.

"Side earnings of any kind can push you into higher tax brackets. If you’re influencing on the side, you have a £1,000 personal allowance before you have to start paying tax."

He added: “But, even for those getting money from content creation on the side, these earnings could make you liable for tax, with gifts you receive from brands potentially being part of your tax obligation, say experts.

"If you’re not careful, these additional gifts and payments could lead to fines from HMRC."

"Not every freebie is automatically income. If a brand sends you a small gift with no obligation to post, say a £50 candle, this is usually considered a genuine gift, not taxable," Mitch went on to say.

"Similarly, occasional low-value items (under £50) without any expectation of promotion generally don’t need to be declared."

He went on: "Good record-keeping habits help avoid surprises when it comes to tax season, as well, so make sure you keep track of everything related to your influencing work.

"You can either use a spreadsheet or there are a number of apps that can help you keep things organised.

"You’ll likely need to claim gifts you’ve received on your tax return if you: earn over £1,000 from influencing in the tax year, receive gifts worth over £50, receive gifts in return for promoting services or products on social media.

"While free products can feel like a perk of being an influencer, HMRC sees them differently. If a brand provides you with something and expects promotion in return, that gift is treated as a form of payment - meaning it’s taxable."

The rules form part of a wider Government effort to squeeze down on tax dodging, which cost the Treasury an estimated £12.4billion in a single year.

Under a separate digital reporting scheme due to come in, almost 900,000 small business owners could be hit with fresh compliance costs of up to £500.

The rule, which comes into force on April 6 2026, will apply to people who earn at least £50,000 from self-employment or rental properties.