Starting to make money from blogging is so exciting - it's a sign that you're doing well and people are paying attention!
Creating a business out of a hobby is a huge achievement, and you might be wondering what the legal implications are or feeling a little worried about what you need to do. But worry not! I'm going to tell you everything you need to know, and it's all pretty straightforward.
Register as self-employed and file a tax return once a year
As soon as you start earning money you haven't yet paid tax on, you're a business in the eyes of HMRC and will need to pay tax on your profits. So make sure you register as self-employed with HMRC. It's a pretty simple process which will take you about an hour, if that. Here's my guide to registering.
Once you've registered, you'll need to file a tax return every year to confirm your income and expenses, so HMRC can work out how much tax you'll need to pay. Here's my step by step guide to filing your tax return.
Track the money you make from blogging and any money you spend on your blog and keep evidence of it
To work out your tax bill, you'll need to keep records of all your business transactions and any evidence you have of them (e.g. receipts, invoices and bank statements).
The easiest way to do this is by using a spreadsheet - this seems like a good time to tell you that I offer a free template to help you do this!
It's important not only to track any money you make from blogging, but anything you purchase for your blog too, as you will be able to subtract some of these costs from your profits, which will reduce the amount of tax you need to pay.
Keeping up to date with what you've earned will allow you to see how much money you've made so far from blogging, which can be a great motivator!
Don't be naive when it comes to getting paid
So many bloggers struggle with brands paying them late - while there's no way to make them pay on time, there are definitely some things you can do to minimise the chances of it happening.
Whoever you work with, always make sure there's a contract in place signed by yourself and the company to confirm the work you'll be doing and your payment terms (how much you'll be paid, when you'll receive payment and what will happen if you don't get paid!) as this should protect you from being taken advantage of and also makes you seem experienced and professional.
Send your invoice as soon as your work is complete, and if it becomes overdue, don't be afraid to contact the brand to ask when you can expect to be paid.
Look at other opportunities to earn money from your blog
If you're serious about turning your blog into a business, look at other opportunities to make money from your blog and make a plan to help you start earning. Here are some ideas:
- Brand collaborations and sponsored content - you could approach brands you like and see if they're interested in working with you. There are also blogging networks and boards which advertise opportunities.
- Affiliate marketing - you can join affiliate programmes (there are networks like ShopStyle Collective and Awin or you can Google the company + affiliate scheme) and share links on your blog/social media. If someone purchases something you'll get a small commission on the sale. Ana from The She Approach shares a lot of helpful tips for affiliate marketing and explains it much better than me!
- Offer your services - if you've started making money from your blog, people will want to know how you've done it! Why not offer blog advice to share your knowledge?
- Create products - lots of bloggers create products to compliment their blog. For example, if you're a travel blogger, you could create city guides, or if you share recipes, you could create your own ebook of recipes
Do you make money from your blog? If so, what do you wish you'd known beforehand?
I'm a financial coach and mentor helping female business owners to gain the knowledge and confidence they need to manage their finances successfully and have a positive relationship with money. If you're ready to take control of your finances, click below to find out how I can help you.
I also have a range of amazing resources which you can use to help improve your business finances.