Business

Influencers warned by Revenue over fully declaring income

Social media influencers reminded gifts and services must be properly accounted for

Revenue issued 142 letters to influencers last year under what they term a Level 1 Compliance Intervention, effectively warning that income, gifts, free goods and services, virtual currency or token payments needed to be properly accounted for.

Ken Foxe
Tue Jan 16 2024 - 06:00

The Revenue Commissioners said they hoped a warning letter to social media influencers about fully declaring income would create a “cascade effect” that would make all influencers think twice over whether they needed to make additional tax returns.

Revenue issued 142 letters to influencers last year under what it terms a Level 1 Compliance Intervention, which was effectively an early warning that income, gifts, free goods and services, virtual currency or token payments needed to be properly accounted for.

It has now been learned that a further 78 letters issued to social media stars under Level 2 Compliance Interventions, which Revenue said were “intended to challenge noncompliance by the taxpayer” over non-declaration of income.

Internal documents detail how the crackdown had been under long-term consideration with the Revenue’s Risk System Unit already working on a social media strategy as far back as July 2021.

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An action point said: “Compile a list of 100 micro and mid-tier influencers and consider feasibility of issuing ‘level 1′ type intervention letters – advising of tax obligations, including a questionnaire/checklist so we can collate/analyse the findings and monitor taxpayer behaviour.

“Revenue issuing ‘light touch’ interventions would create an awareness across the industry and hopefully create a cascade effect with taxpayers assessing their own situation in terms of tax compliance.”

Another note said that a “generic letter” would first issue to encourage voluntary compliance, advising about the tax implications of financial payments, gifts, and free use of goods such as cars.

It added: “A specific response would not be requested. These cases would subsequently be monitored for behaviour changes in terms of registration and filing activity.”

Internal messages also detail discussion over what could and could not be considered income for a social media influencer.

One email said “paid promotions” were very clearly advertising but that other types of more subtle sponsored content might not be so clear-cut or easy to identify.

Another message asked how they would get to grips with individuals who receive gifts, sometimes of high value, in exchange for “brand promotion”.

How to deal with income earned from OnlyFans was also discussed with officials in Revenue, saying the website made clear to creators that they needed to make sure their tax affairs were kept in order.

A spokeswoman for the Revenue Commissioners said: “[Our] mission is to collect the taxes and duties owed to the State in a fair and efficient manner. Revenue supports voluntary compliance by providing services to make it as easy as possible for taxpayers to comply with their tax obligations, and monitors tax compliance through a range of risk identification, assessment and evaluation programmes and processes.

“These programmes and processes are supported by data analytics and the interrogation of both taxpayer and third-party information. Where appropriate, a risk intervention may be conducted to confront cases displaying noncompliance indicators and/or challenge aggressive tax planning.”

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