More than 450 letters have been issued to social media influencers by the Revenue Commissioners reminding them of their tax obligations, including their duty to declare income from online activities and gifts they receive.
Amid an increased focus on the influencing sector, Revenue has issued 457 letters since September 2023 to support voluntary compliance and “address areas of noncompliance” with the latest batch being sent in October.
The notices advise that Revenue is “aware of the income earning potential” of online activities, and warns that those in receipt of varying forms of income, such as gifts or virtual currencies, are obligated to include this income on their tax returns.
Three batches of letters have been addressed to influencers across Ireland in the last two years, with 307 issued in 2023, and a further 150 issued in October 2024, according to records released under the Freedom of Information Act.
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Revenue said in a statement it was aware that the practice of using social media and other online platforms to earn money has become “more prevalent in recent years.
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“This is, therefore, an emerging area of focus within our ongoing programme to support voluntary compliance and address areas of noncompliance,” it said.
It said it is also aware some influencers might be “unaware of their tax obligations,” or the tax treatment applicable to their various forms of income.
A small gift exemption allows someone to receive up to €3,000 per donor per year in gifts, with no tax liability, though a 33 per cent capital acquisitions tax rate applies to the value above €3,000 thereafter.
Those who do not report income or underreport can face interest on outstanding tax liabilities, as well as penalties ranging from 3 per cent to 100 per cent of any underpaid tax based on various factors.
They may also be liable to inclusion on the tax defaulters list and a criminal prosecution, said Revenue.
Revenue said it will continue to use including third party information, intelligence, taxpayer returns and “other sources” to identify noncompliance.
Accountant and tax adviser Alan Purcell, of CloudAccounts, which has several influencer clients, said the number of letters issued is lower than expected.
“I nearly follow 450 influencers myself, I would imagine there’s far more of them but it’s hard to know which influencers are making money and which ones aren’t. Some of them are probably millionaires and some are scraping a few quid together,” he said.
“Maybe there are hundreds who are fully compliant, like the few I’m working with, they won’t get a letter because there’s nothing to contact them about.”
Influencers managed by agencies are often tax-compliant, he said, though others are “winging it or are unaware of their obligations”, particularly when it comes to gifts such as free products or hotel stays given in exchange for reviews.
“If they knew they have tax obligations, they might not be accepting these gifts but there are loads of influencers who just answer the door to the postman every day and have a litany of gifts,” he said.
In any sector, there those who are non-compliant, or “dabbling in the black market,” Mr Purcell said.
“Some know they’re doing that and are rolling the dice but some are ignorant or unaware,” he said.
The same rules apply for content creators reviewing food in Ireland, which has become a particular niche, he said, some of whom are earning “small fortunes to review battered sausages”, he said.
“One business brought in an influencer to review their food and they charged about €10,000 just to show up. The next day, there were queues down the street,” said Mr Purcell.
“They’re doing what they’re doing and if they’re getting paid for it, they just need to make sure they’re declaring the income because all income is taxable.”
