What are benefits in kind for influencers and content creators?
If you run your creator business through a limited company, it can be tempting to put as many costs as possible through the business.
But just because your company can pay for something doesn’t necessarily mean it’s tax-free.
If your company pays for something that gives you a personal benefit, a Benefit in Kind (BIK) could arise. For influencers and content creators, this can be particularly relevant when business and personal spending can easily overlap.
What is a Benefit in Kind?
A Benefit in Kind is essentially a benefit that you receive from your limited company which isn’t included in your salary.
This can happen when your company pays for something that has a personal element and you don’t reimburse the company for it.
In these circumstances, you may have received a taxable benefit.
Depending on your circumstances, you could then have to pay Income Tax on the value of that benefit, while your company may also have a National Insurance liability.
Benefits in Kind may also need to be reported to HMRC, traditionally through a P11D, with reporting deadlines applying after the end of the tax year.
What could create a Benefit in Kind for a content creator?
For creators, the line between business and personal spending isn’t always obvious.
Your work might involve clothing, travel, technology, cars or products that you also use in your everyday life.
Examples of costs that could potentially result in a Benefit in Kind include:
- Your company purchasing non-business clothing
- Your company purchasing luxury items for you
- Your company providing you with a car
- Your company loaning you money
The important thing is to consider whether there is a personal benefit as well as a business purpose.
How does a Benefit in Kind work?
One of the easiest examples is a company car.
Imagine your limited company buys you a car worth £30,000 which you use for both business and personal journeys.
Because there is a personal element to the use of the car, a Benefit in Kind could arise.
The taxable value of a company car is not simply based on what your company paid for it. HMRC calculates the benefit using factors including the car’s list price and CO2 emissions.
If, for example, the taxable benefit was calculated as £6,000 for the year, you would pay Income Tax based on that taxable value and your personal tax rate.
Your company may also have to pay Class 1A National Insurance on the benefit.
The result is that something which initially seems like a straightforward company expense can create an additional tax cost for both you and your business.
How and when are Benefits in Kind taxed?
As noted above, you will need to review when you first had access/use of the benefit in kind and look at which tax year this falls into to determine when you need to prepare a P11D.
These forms must usually be submitted to HMRC by 6 July following the end of the tax year, with Class 1A National Insurance paid by the employer shortly thereafter. The recipient will pay personal tax on this benefit in the year it’s received, typically when filing their personal tax return.
However, from 6 April 2027, mandatory payrolling will apply to a select group of benefits which is expected to include:
- Company cars/vans
- Car and van fuel
- Private medical insurance
This list is likely to be extended from 6 April 2028 but has not yet been confirmed by HMRC.
This will mean declaring what benefits are being provided and when to HMRC in a more timely manner so that taxes are withheld from employee’s net pay and paid over to HMRC by the employer via tax code changes.
It’s therefore imperative to familiarise yourself with this process to be able to communicate this change with employees, or even your own remuneration package so there are no nasty surprises when payslips are issued.
What about clothing, luxury items and other creator expenses?
The same principle can apply to other things your company pays for.
Imagine your company buys designer clothing which you wear while creating content but also wear personally. There may be a Benefit in Kind to consider.
The same could apply if your company buys you a luxury watch or provides you with an interest-free loan.
For content creators, this is particularly important because there can often be a crossover between items used to create content and items that provide a personal benefit.
A purchase appearing in a TikTok, Instagram Reel or YouTube video doesn’t automatically make the whole cost a business expense.
Is something a business expense or a personal benefit?
One of the key questions to consider is whether the expense is genuinely for business purposes or whether you also receive a personal benefit from it.
If there is a personal benefit and you don’t reimburse your company for the relevant amount, there may be tax consequences to consider.
This is why keeping personal and business spending clearly separated is so important when running a creator business through a limited company.
What should influencers and content creators do about Benefits in Kind?
If your limited company regularly pays for costs that could have a personal element, there are a few things worth keeping on top of.
Keep good records
Make sure you have clear records of what your company is paying for, particularly where something could have both a business and personal purpose.
Make sure benefits are reported correctly
Benefits may need to be reported to HMRC, so make sure your accountant knows about any personal benefits you’ve received through the company.
Understand the potential tax cost
Don’t just look at the initial cost of the purchase. Consider any personal Income Tax and National Insurance implications that could arise as well.
Consider whether putting it through the company makes sense
Sometimes the tax consequences can mean that purchasing something through your limited company isn’t as attractive as it first appears.
Before putting a significant purchase through the business, it can therefore be worth speaking to your accountant.
Don’t assume your company should pay for everything
Running your creator business through a limited company can have plenty of advantages, but it doesn’t mean every purchase should automatically go on the company card.
Where there is a personal element, a Benefit in Kind could arise and create additional tax and reporting requirements.
For influencers and content creators in particular, the distinction between work and personal life can be less obvious than it is for many traditional businesses. Clothing, cars, technology and other purchases might form part of your content while also being enjoyed personally.
Understanding where that distinction sits can help you avoid unexpected tax bills and make better decisions about what your company pays for.
At StarBox, we specialise in accounting and tax advice for influencers, content creators, streamers, gamers and digital entrepreneurs. If you’re unsure whether something you’re putting through your limited company could create a Benefit in Kind, get in touch with our team.