Online Influencers, What Expenses You Can Claim

Online Influencers were targeted in the 2018/19 budget with a focus on income based on image rights. At the time it was said “This measure will ensure that all remuneration (including payments and non-cash benefits) provided for the commercial exploitation of a person’s fame or image will be included in the assessable income of that individual”.

This inclusion in the budget of online influencers illustrates the impact that they are having on our society. Suddenly they have become their own income earning group with fitness influencers such as Kayla Itsines earning $17 million in 2016 purely from her app. {reference:}

It’s not only the big earners who need to keep a close eye on their tax obligations, if you are part of the influencer world you need to be just as savvy about your finances as other small business owners.

One of the biggest areas where I see online influencers slipping up is in claiming deductions. It can be easy to think that because you spend a lot of your gym time posting selfies and promoting your next products that your expenses here are a work expense but the ATO sees it very differently.

Here are some basic rules that you can apply to your expenses:

  • Are you a business? If your influencer work is just on the side and you are not earning an income from it, chances are you won’t be able to claim your expenses yet. The ATO allows you to claim tax deductions for expenses that you incur whilst earning an income, therefore no income = no deductible expenses. There is more information on business v hobby here –
  • Is the expense really business related? Think of this question from the ATO’s perspective for example if you are a food blogger you can’t claim your lunch even if it sparks some great ideas for your next post or you share it to Instagram. The ATO considers this mainly personal and will not see it as an authentic business expense.
  • What if it is used for business and personal? An expense does not have to be one or the other, there can be a portion which is used for both. For example if you run a home office but you also use the internet to catch up on Game of Thrones there you can claim a portion of your internet but not all of it. In order to claim it all you would need to be using it exclusively for business use.
  • Do you have records to support your claim? The ATO can audit you at any time and online influencers are an area they are keeping a close eye on if the budget was anything to go by. So, make sure you keep all your receipts and invoices for any purchases for the required amount of time. This can be done in any way that works for you but I always suggest electronically with some kind of backup eg as attachments in your accounting system and then a folder in Dropbox by year.

Online Influencers aren’t going away and the ATO is likely to include further specific rules in the future but these questions should be the bare minimum you are considering. As with any small business it is always advisable to seek the advice of a qualified professional.

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