New research finds the average Brit earning money through social media makes £1,223 a year, above HMRC’s £1,000 trading allowance.
But only 44% of those making extra income online say they’ve registered for self-assessment with HMRC.
Over half (52%) of social media earners don’t realise they might need to pay tax on additional income or gifted items.
Failing to abide by the tax rule could cost TikTok, Instagram and YouTube users more than £2 million in fines.
New research from Tide, the UK’s leading business management platform, reveals that the rise of the creator economy is helping millions of Brits turn their passions into profit - with the average social media earner now making £1,223 a year.
However, as more creators transform side hustles into thriving small businesses, many may be unaware of HMRC’s £1,000 trading allowance - meaning they could unintentionally miss out on staying fully compliant as their ventures grow.
Platforms such as TikTok, X and YouTube give anyone the opportunity to make additional income. This could be through promoting products available on the TikTok shop, brand collaborations or the monetisation of high-performing content. Tide’s research has found that four in ten (42%) social media users aged 18 and over have received money or free gifts in return for their posts.
The average annual financial gain for this activity is £1,223, with a fifth (21%) of those who receive income for their content making over the £1,000 HMRC tax-free allowance on trading income.
However, despite the legal requirement to file a self-assessment tax return if any additional earnings, including the value of gifted items, total more than £1,000 in a single year, just 52% of social media users say they are aware of this requirement. With only 44% of those who make money from their content saying that they have filed a self-assessment with HMRC.
With penalties starting at £100 for missing the self-assessment filing deadline and increasing the more time passes, fines could total well over £2 million in a single year.
These figures are most concerning for social media users aged 18 to 24-years-old, as just 36% of them have filed a self-assessment with HMRC, despite more than half (55%) making financial gain from their social media activity - the highest of any age group surveyed.
Heather Cobb, UK Managing Director at Tide, warns social media users that they could be at risk of penalties if they’re not aware of the rules:
“It’s great that TikTok, Instagram and other social platforms have opened up new ways for people to add to their income, and what might start as a bit of extra pocket money can quickly spiral into a serious side hustle.
“Most people won’t treat this as a legitimate business venture at first, so it can be easy to lose track of exactly how much has been made over the course of a year. Especially for those who receive gifted items in return for social media promotion, as the value of these items also counts towards the yearly £1,000 allowance. Unknowingly going over this can result in a costly penalty.
“This can range from a ‘failure to notify’ penalty to late return and payment penalties. As these penalties are often based on a percentage of the tax owed, they can amount to substantial sums for millions of creators to cover.
“Our advice is to keep track of what you earn from the very first payment, and Tide makes it easy to open a separate business account for each business you run. Tools such as Tide Accounting also make it easy to track earning and expenses. That way, you’ll be able to understand whether you’re over the allowance and need to tell HMRC, as well as monitor the growth of your new side hustle”.
Which Regions Earn The Most on Social Media?
Tide’s research also analysed which regions could be at the largest risk of these penalties, due to residents earning high amounts through their social media accounts.
More than £700 above the national average, social media users in Eastern England are making the most use of the extra earning opportunity of social media, followed by those in London and the North East.
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Megan Paul, Tide member, Content Creator and Founder of Gel by Megan in Warwickshire commented: “What started out as me posting photos of my nails on Instagram as a creative outlet alongside my ‘day job’ in the civil service, quickly grew to thousands of followers, brand partnerships, sponsored posts and now my own training academy.
“I took the leap to being self-employed four years ago, and my social media earnings have definitely helped me on my way. Taxes and self-assessments may feel scary, but most areas have thriving small business communities that you can lean on for advice, while modern business management platforms take a lot of stress out of the admin and organisation of your finances.
“I would urge anyone making additional income from a passion project or content creation to not just view it as that little thing you do on the side, but to figure out whether it’s something you could take more seriously, and turn it into doing something you love full time”.
The first step for many when making additional income is to open a separate bank account to enable easier management and visibility over their finances. Tide offers a free business current account that offers auto-categorisation, perfect for itemising social media earnings and keeping your finances organised.
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About Tide:
Launched in 2017, Tide is the leading business management platform in the UK. Tide helps small businesses save time and money by not only offering business accounts and related admin services, but also a comprehensive set of highly usable and connected administrative solutions from invoicing to accounting and adjacent commercial services such as website building.
Tide has nearly 800,000 SME members in the UK (14% market share) and more than 800,000 SMEs in India. Tide launched in Germany in May 2024 and France in September 2025. Tide has also been recognised with the Great Place to Work certification three years in a row. Tide has been funded by Anthemis, the Apax Digital Funds, Augmentum Fintech, Creandum, Salica Investments, Latitude, LocalGlobe, SBI Group, Speedinvest and TPG, amongst others. It employs more than 2,500 Tideans worldwide. Tide’s long-term ambition is to be the leading business management platform globally.
Methodology:
Tide surveyed 1,000 UK social media users aged over 18 years of age in collaboration with 3Gem research and insights.
Existing figures that show 54.8 million people use social media within the United Kingdom were used to calculate the following stats:
‘As many as 4.8 million social media users could face fines’: 42% (the number that earn money via social media) of 54.8 million is 23,016,000. 44% report registering a self-assessment via HMRC, equalling 10,127,040. 21% of 10,127,040, the number of social media users earning over the £1,000 allowance but likely not registered with HMRC, equals 2,126,678.
‘Fines could total more than £2 million: As the minimum fine for failing to notify HMRC of additional earnings is £100. Multiplying this £100 amount by the 2,126,678 figure above, equals £2,126,678.
‘Over one million UK social media users are earning £5,000 or more from their social media activity’: 42% (the number that earn money via social media) of 54.8 million is 23,016,000. Therefore, 6% (the number earning £5,000 or more via social media) of 23,016,000 is 1,380,960.
All data correct as of October 2025.
