Free products are one of the perks of the influencer job. Brands send them, creators feature them, everyone wins. Except HMRC has a clear position. If you receive a product in exchange for content, that product is taxable income at its retail value. The rules around gifting are stricter than most creators realise, and HMRC enforcement has stepped up sharply since the digital platforms reporting rules came in.
A Gift vs Earned Income: The Test HMRC Applies
A genuine gift with no strings attached is not taxable. A gift conditional on you posting about it is income. The test HMRC applies is whether there is an underlying expectation that you will create content, mention the brand, or otherwise provide a service in return. If the answer is yes, the product’s retail value is taxable as trading income, even if no cash changes hands. The intention behind the send matters more than the language on the package.
Valuing PR Boxes Correctly
Where a PR item counts as income, it is valued at its market value at the time you receive it. The accepted practitioner approach is to take the retail price a normal customer would pay, on the basis that this is what you would have paid for the item if it had not been gifted. A skincare PR box that retails at £200 is treated as £200 of income, even if the brand’s wholesale cost is half that. Keep records: what arrived, when, the value, and the brand.
What If You Did Not Post About It?
Items received unsolicited that you genuinely did not promote sit in a grey area. If you did not engage with the brand, did not post, and had no agreement (formal or implied) to promote the item, HMRC may accept it is a gift rather than earned income. The burden of proof sits with you. Keeping the brand’s email showing no obligation helps. Posting a story tagging the brand undermines the whole argument and pulls the item back into income.
Costs You Can Claim Against PR Income
Once you declare PR boxes as income, you can claim associated costs as expenses. Camera equipment used to film unboxings. Editing software. Props. Postage costs for sending items back. A proportion of your home filming setup. All allowable. What you cannot claim is the cost of the items themselves, because you did not pay for them.
Where VAT Gets Involved
If you are VAT registered, gifted products complicate things further. HMRC treats the receipt of goods in exchange for promotional services as a barter transaction. You are providing a service (promotion) and receiving goods of equivalent value in return. The VAT treatment depends on the value, the type of service, and whether the brand is UK-based. The rules are technical and most creators get them wrong without specialist help.
Press Trips, Hotels and Experiences
Travel and experience PR sit in the same category as products. A hotel stay worth £500 received in exchange for content is taxable at £500. A press trip with flights and hotels included is taxable at the package value. The fact that you did not receive cash is irrelevant. The market value of the experience is what HMRC uses.
The clean approach is to log every PR item and experience as income at retail value, then let your accountant categorise it correctly at year end. A specialist creator tax deductions service makes sure you claim every allowable expense against gifted income while keeping the records HMRC will actually want to see.
