ATO vows to crack down on glam ‘influencers’ and their ‘gifts’

The ATO is targeting Australia’s multimillion-dollar ‘influencer’ industry, vowing to tax social media stars’ ‘gifts’ from companies, make them pay GST, and stamp out bogus deductions.

The ATO is coming for ­Australia’s multimillion-dollar “influencer” industry, with a promise to tax glammed-up social media stars on gifts they receive from companies, make them pay GST, and stamp out bogus deductions.

The Daily Telegraph can reveal Australian Taxation Office staff have an arsenal of “data-matching” technologies to help them compare tax returns of “Insta-famous” people with the lifestyle and valuables on display in their online posts.

An ATO spokesman confirmed the fresh crackdown, saying: “If you are paid in-kind, such as with goods or other benefits (for example, being able to keep an item or outfit used in a post, or being ‘gifted’ something) … you are subject to the same income tax and GST treatment as normal cash or credit payments.

“We have sophisticated data-matching and analytical tools that enable us to identify people that may be under-reporting their income from a range of activities.”

Influencers who make an income from their posts are required to pay tax, even if it’s just a hobby, and if they make more than $75,000 they also have to register for GST.

Suzan Mutesi agrees that influencers should pay tax, but says working out the value of gifts from companies can be complicated. Picture: Tim Hunter

The value of all “gifts” given to influencers in exchange for promotional posts must be declared as income. It is Australian law that influencers disclose publicly when they are promoting “non-cash benefits” by using the hashtags “ad”, “gifted” and “sponsored”.

Gifting is an increasingly common practice for businesses and public relations executives instead of cash payments.

Influencer Jade Tuncdoruk shows off her luxe life, with a gift/ad tag. Picture: Instagram

“Cash is really simple, but if you are gifted product in return for a service, it is much harder to police,” said one high-profile accounting executive, who did not want to be named.

“It is a grey area … the tax office will say, take the recommended retail price, then you must pay tax on that, but the key question will always be: what is the benefit for the recipient if they have to pay tax on something that they don’t technically pay money for?

“It is well and good to walk around with a $5000 handbag, but if you can’t afford the tax, what is the point?

“It is a game-changer that will have influencers rethinking the situation.”

Former AFL WAG Bec Judd has a thriving career as an influencer. Picture: Getty

One celebrity agent, who also did not want to be named, was thrilled to learn of the crackdown, saying “the gravy train is over for influencers”.

“A crackdown will take a much-needed weed whacker to the infestations of wannabe Kardashians of late,” the agent said.

Sydney influencer Suzan Mutesi said she was not surprised the ATO was clamping down.

“You have to adjust to the rules,” she said.

“If you classify yourself as a sole trader, report how much you earn.

“I think just do it right because then it doesn’t bite you in the back later.”

However, when it came to reporting the value of gifts, Ms Mutesi said the process was quite complicated because it could be hard to know their true value.

“It’s hard. There are certain things they (companies) would give you that are samples and they’re not for sale. How do you value that,” she said.

“Let’s say, if Gucci sends you a bag it can be different. It’s not going to be what the consumer will buy, because they are buying it so theirs will probably be bigger and have more details.

“Sometimes they personalise your gifts, like sometimes I get perfumes with my name on them or they’ll put on a personal message, so it’s different.”

Ms Mutesi said there were also instances where influencers were given gifts when they went to events.

“You might go to a shop, and if you’re a celebrity and you’re just given something, does that mean you need to report that to the ATO?” she said.

“It’s really hard to know. I think with the gifting, they (companies) should leave it unless it’s paid and you have to report it as a job.”

According to the ATO, personal gifts given without the expectation of a service in return do not need to be declared for tax purposes.

Prominent influencers Jade Tuncdoruk, Olivia Molly Rogers, Bec Judd, Jono Castano, Rozalia Russian, Chantelle Stanton, Lisa Danielle Smith and Lucas White Smith regularly use “ad” or “gifted” hashtags or “paid partnership” on their posts from luxe clients.

The Daily Telegraph does not suggest any of these names do not pay tax or make bogus deductions.

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