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HMRC internal manual

Business Income Manual

Miscellaneous income: particular sources: authors

S687-S689 Income Tax (Trading and Other Income) Act 2005, S979-S981 Corporation Tax Act 2009

An author who:

  • organises their life so as to regularly spend time on their writing to produce work which has a commercial value, and
  • combines this with a persistent and systematic marketing of the work for their own financial benefit,

is carrying on a profession and the profits are chargeable as trading income.

Someone who writes a book or article who is not carrying on a profession is taxable on their literary earnings under the sweep-up charge as miscellaneous income.

This is shown by the decision in the case of Ryall v Hoare [1923] 8TC521 where Rowlatt J said at page 527:

‘Now, a man may carry on no business and no profession; he may not be a journalist, he may not be all author, but he may be called upon to write an article for a paper for reward. He may find that there would be a demand for a single book from his pen, as a traveller, a soldier, a sailor, or a statesman, or what not. Now, it seems to me that all cases of that kind, like this case of these gentlemen who gave this guarantee, are instances of casual profits which cannot in any way be distinguished from the profit which is obtained by a man who lets his house furnished.’

Traditionally the type of author whose activities would not amount to a trade would include those whose prime motive may be the desire for fame or personal satisfaction, what is sometimes called ‘vanity publishing’.

It also includes those motivated by the desire to enhance their reputation in a particular field or the desire to leave the benefit of their knowledge to posterity.

Modern technology and self publishing

Modern technology provides many options for small scale publication. Computers enable more people to self publish, with the availability of ‘print on demand’ allowing production of small numbers of books.

The technology used does not change the position, and the same principles apply. Where the activities do not amount to a profession, any profits are taxable under the Miscellaneous Income provisions.