At first glance, Donna Dunne appears to fit the standard “influencer” mould. A popular fitness guru from Kilkenny, her no-nonsense fitness and diet advice, and candid glimpses into her private life – her most recent troubles document a break-in to her camper van on a family holiday in France – has amassed 24,400 followers on Instagram, and more than 22,000 likes on TikTok.
But Dunne describes herself as an anti-influencer because she doesn’t accept freebies, refuses to promote products, and only ever recalls being offered a €30 voucher from Supermac’s which she promptly turned down – she is all about fitness after all, and scoffing a free burger doesn’t quite fit the brand.
So when Revenue finally published a long-awaited manual on Taxation of Income from Social Media and Promotional Activities last week, Dunne was oblivious. With a day job as a lecturer in exercise science at Carlow’s South East Technological University (SETU), her social media presence was never about making money from sponsors or brands, but alerting followers to her online fitness membership plan, which costs from €25.99 per month.
“Legit, I haven’t been offered PR stays in hotels or free dinners anywhere,” she said. “The beautician up the road from me will every now and then tell me to come in for a facial or have a treatment at Christmas, but I always make sure I pay. I see so many influencers on the likes of Instagram and Facebook doing their hashtags left, right and centre for ads or brands or whatever, and all I can think is that these people must have agents because all I was ever offered was a €30 voucher for Supermac’s, which I said ‘no thanks’ to.”
RM Block
Dunne’s relaxed reaction to the new Revenue booklet is because she has nothing to declare beyond her annual tax declarations for her sideline fitness business.
“I do my fitness stuff online because it keeps me feeling alive and forces me to get up every day and think of something positive to say to all my members,” she said. “If you’re getting paid €10,000 to do an ad, you should be registered as a limited company or a sole trader and that has to go on your books as income. That’s what you must do.
“I think what’s going to change now is that the gifts will stop coming and everything that happens now will be reported much more. I don’t begrudge influencers for making a living, but there has to be transparency not just in what they earn but in what they are promoting.”
While the tax obligations of influencers have been quite the talking point in recent years, Revenue’s new and updated publication, along with an additional manual on VAT – spoiler alert, “there are no special VAT rules for influencers” – is now irrefutable.
Written in layman’s terms with examples pertinent to the world of social media personalities, the manual is designed to leave influencers in no doubt about their tax obligations.
In one example, the booklet reads: “Emily, a fashion commentator, is attending a fashion show. She buys a new designer jacket to wear to the show because being well dressed is essential to the success of her online content. The cost of the jacket is not deductible in computing the profits from her trade.”
It’s the latest unwanted Revenue spotlight to shine on Ireland’s budding community of influencers. In March, the tax authorities sent more than 450 tax compliance letters to social media influencers regarding undeclared income, gifts and services, sparking a flurry of calls to accountants from panicked social media personalities.
Of course, some haven’t helped themselves by underdeclaring their income, whether by misinterpreting their tax obligations or simply not being aware that a #gifted or #ad post can equate to #tax bill.
In March, Irish influencer and OnlyFans star Matthew Gilbert was named in a list of tax defaulters after reaching a settlement of more than €350,000 with Revenue towards the end of last year.
“Influencers have always been subject to tax on their income – in cash or kind – but because of a lack of tax literacy among the general public and among non-tax professionals, it may be that people who are influencing have genuinely not understood their obligations because it’s very easy when people are paid cash,” said Laura Ellen Ford, a senior tax associate with Eversheds Sutherland.
“The big thing that a lot of people are struggling with is non-monetary compensation,” she said.
[ Honest influencers: I have ‘never made any money, ever’ from online contentOpens in new window ]
“Rightly or wrongly, there may have been this misconception that if Adare Manor or another hotel turns around and says, ‘You can come and stay for two nights, you can go to the spa, and you or your partner can do a round of golf on our award-winning course, but you have to post 15 posts or 10 posts over the next two weeks talking about how great we are,’ are you actually being paid for those posts? And the fact is yes, you are, but it’s non-monetary compensation.
“The problem is a lot of people wouldn’t have realised that monetary compensation has a value, and it’s the value that you would pay for it and that’s the amount you are supposed to be taxed on.
“Revenue has a very good example in the manual: that if you get sent out a product – and we’ve all seen it on social media where people are sent out a PR package – the tax treatment of that PR package depends on what the person receiving it does with it.
“Or let’s say Chapter One turned around to a food blogger and said, ‘We really like your material and we know you’re trying to get into a more fine dining space, so come have dinner on us,’ and then that person creates content on that. Whatever should have gone on that bill could very easily be taxable.”
Ford said an interesting aspect of the new manual settles the argument around influencers as tradespeople.
“Once you get into a trade, you’re into reporting obligations and annual filings,” she said. “People assume, ‘Oh, I have a job, so this [social media page] couldn’t be a trade for me,’ but no, you can have a job and have a trade.
“You’re talking about tax obligations, annual filings, you might have to pay preliminary tax, and if I was to give anyone on social media advice, it would be to ask, ‘Why are you doing this? How often are you doing this? Is this becoming a part-time job for you?’ Because then I hope you’re tax registered, because social media is now a trade for you.”
Another long ambiguous “perk” among more popular influencers has been the acceptance of car sponsorships. This, too, has now been clearly addressed.
“There’s one very famous influencer at the moment and I saw her a few months ago publicising a motor dealership, and she had a big celebration of, ‘Here’s me driving away in my new car from this garage and make sure to give this dealership consideration if you’re buying a new car etc.’ And my first thought was: has she declared that?’” said Alan Purcell, a chartered accountant, chartered tax adviser and founder of CloudAccounts.
“There’s a sizeable value on the use of a car for the year and Revenue’s manual has specific examples. If influencer A has been given a car to promote a dealership, that needs to be declared for tax purposes. That could be expensive for some people.
“The cars will be a huge one because every Gaelic footballer or rugby player, it seems, has been given a brand ambassadorship and Revenue has specifically mentioned brand ambassadors in its manual. If you are one and driving a car for a year, there is a tax on that.”
So how exactly will Revenue keep track of what is a relatively new income earning group on its books?
There is no difference between an influencer and a plumber, an electrician, a hairdresser, an accountant or a journalist. You are a business, you earn income, you can adjust your allowable expenses, you can claim capital allowances if that counts, and if you have a profit at the end of the year, you pay your tax
— Alan Purcell
“A Revenue officer sitting in the cafeteria during their lunch break and scrolling their Instagram could find about 50 influencers in five minutes if they really wanted to,” said Purcell.
“Influencers are not exactly subtle; what they do is very much flaunted in your face. They are good at their jobs, but I would like to see them paid properly. They are probably kind of taken advantage of, let’s be honest.
“A lot of them are young, so if somebody says, ‘Do you want a free night in a fancy resort with a spa treatment thrown in and a bottle of wine?’ who is going to say no to that? But they don’t realise that that could come back and cost them 52.1 per cent of the retail price of that package if they’re at the highest rate of tax.”
Ford said there are many avenues open to Revenue when determining who is fully tax compliant in the social media sphere.
“For the content producers who are on the likes of Patreon or OnlyFans, which facilitate payments, there’s a thing called DAC7,” she said. “It came out a few years ago and it’s an EU law that’s been transcribed into Irish law that basically says if you’re on a platform selling goods and services, and that platform is facilitating your payment, those platforms are required to get your tax information from content producers and report that back to Revenue. They legally have to do it.
“If you’re on OnlyFans or even the likes of Airbnb – any platform where you provide goods or a service and the platform facilitates your payment, and you’re an Irish tax resident – then you are reported to Revenue on an annual basis anyway.”
And that’s not all.
“I don’t want to say Revenue people are sitting on their phones scrolling social media searching for you, but if you’re a media influencer and you’re popping up in The Irish Times or on Ireland AM or for well-known brands on social media, Revenue are humans like the rest of us and are on social media as a matter of course and they will see your content,” she said.
“There seems to be this mental image that everyone in Revenue is an auld fella in their 60s and on typewriters, and that’s just not the case.
[ Social media influencer posted ‘misleading’ adverts on Instagram, regulator findsOpens in new window ]
“If your granny knows someone is on social media and making money from it, it’s not unfair to assume that someone in Revenue knows who you are. If you’re putting yourself out there and making a lot of sponsored content ... Ireland is a small country; it’s safe to assume that someone from Revenue is following you.”
Purcell agrees.
“The manual states there is no difference between an influencer and a plumber, an electrician, a hairdresser, an accountant or a journalist. You are a business, you earn income, you can adjust your allowable expenses, you can claim capital allowances if that counts, and if you have a profit at the end of the year, you pay your tax,” he said.
“Ignorance is not an excuse – and that’s not just me saying it, it’s Revenue’s line, because you should be aware of your obligations and have spoken to an expert and know that the same rules apply to everybody.”
