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HMRC internal manual

International Manual

DT applications and claims - Types of income: Royalties

Professional authors

Copyright royalties that are payable to an author/originator of a literary, dramatic, musical or artistic work that has been created in the ordinary course of his profession (an “author by profession”) fall into the same category as fees for professional services and do not come under ICTA88/S536. Payments that are made to an author by profession who usually lives overseas are therefore not subject to deduction of UK income tax at source. This follows the decisions in Carson v Cheyney’s Executor (38 TC 240) and Hume v Asquith (45 TC 251).

You should not discuss whether any payment should be categorised as a fee or a royalty. The Inspector of Taxes who is responsible for the Corporation tax affairs of the person that is making the payment is responsible for dealing with any enquiries about how payments should be categorised.

A Professional Author can be classed as such if he is clearly the originator of the work(s) concerned. If the claimant is not the originator of the work but has acquired the rights from that person they may not be treated as a professional author.

You need only write to the claimant/agent for confirmation of this point if there is any indication that the claimant is not the originator of the work(s).

You may receive claims from Professional Authors in either of the following ways

  • under a Double Taxation Agreement (DTA) on the appropriate claim form
  • by letter from the claimant, agent or publisher.

You should authorise relief in the normal way under the DTA except where full relief is not due.

Full relief may not be due where, for example, either the royalties article of the DTA does not provide it or the claimant does not satisfy all the conditions for relief. In such cases you should give relief on Professional Author grounds.

Where the claimant lives in a non-DT country, or a country where the DTA does not provide full relief you can accept a claim by letter from the claimant, agent or publisher. The letter should give the following information the full name of the author

  • residential address of the author
  • the full title of the work(s)
  • the name and address of the payer of the royalties.

If you have any difficulties, you should refer the file to Technical Advice Group.