Hundreds of influencers have been sent letters reminding them they need to pay tax on gifts they receive and promote on social media. 

Since 2023, 450 influencers have received such a letter, which Fairstone Ireland CEO Paul Merriman described as a “gentle nudge” to social media stars.

On The Pat Kenny Show, Mr Merriman said the number of letters was a “really low figure”. 

“If they are receiving gifts, if they are promoting goods online in lieu of payment, they will have an income tax liability in most cases,” he said. 

“In fairness, I’m surprised it’s only 450 letters; the letters started coming out in 2023. 

“So, nearly two-years now and there’s only 450 letters?”

A tax demand letter from Revenue. 

Mr Merriman said many influencers’ social media pages are not their primary source of income and they only regard their page as a side hustle. 

As a result, there is considerable ignorance about the tax implications of promoting events and products. 

“The big thing for people that are on social media as influencers that are bringing in gifts or income, that they do need to make a declaration to the Revenue in most cases,” he said. 

“There’s a couple of rules to go through here quickly. 

“Up to €5,000, you just have to go onto the Revenue site yourself, into the MyAccount section and put in the up to €5,000 and pay your tax. 

“If it’s more than €5,000, you’re going to have to do what’s called a Form-11 and actually submit that tax return to the Revenue Commissioners.”

Gifts

However, Mr Merriman added that people are also entitled to a gift allowance which is tax free. 

“If you’re given a gift from a cosmetic company, for example,” he said. 

“They’re giving you that gift in lieu of payment - and that’s actually income taxable. 

“If they gave you a gift and you didn’t promote it online and you just use it for your own purpose, that falls under the small gifts exemption. 

“That’s €3,000 and you don’t have to declare it.”

Mr Merriman said it is understandable that many people are “quite confused” and said it is “very, very, very important” to get professional advice. 

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Main image: An influencer at work. Picture by: Alamy.com.