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HMRC internal manual

International Manual

HM Revenue & Customs
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DT applications and claims - Types of income: Royalties

A number of different copyright protection societies operate within the UK. Their role is to represent their members and to ensure that royalties are paid for the use of their work.

Performing Rights Society (PRS)

When an individual moves overseas he may decide to continue his membership with the UKPRS as opposed to joining the overseas society. In such circumstances the individual will make personal claims for relief from UK tax.

Mechanical right fees are payments to the composer, arranger, etc of the music recorded. A manufacturer can, subject to certain conditions, make a recording of any music without the permission of the composer, etc but is required by law to pay the composer, or his assignee, a royalty on each record sold. These are copyright royalties within ICTA88/S536 and tax is therefore deductible by the payer. The right of the composer to these royalties is usually known as his “mechanical right” and the payments are known as “mechanical right fees”.

Individuals who receive mechanical rights fees from the Mechanical Copyright ProtectionSociety Ltd must claim in the normal way except that any exemption authority should be effective from the date the MCPS receives payment from the sound user and not the date MCPS pays the claimant

Phonographic Performance Ltd (PPL)

Phonographic Performance Ltd collects licence fees for the public performance of records on behalf of record companies. A proportion of these fees are due to the artistes.Such payments are regarded as royalties for the purposes of Double Taxation Agreements (DTAs).

Equivalent Overseas Societies

Various equivalent overseas societies make claims on behalf of their members for payments made by PRS, PPL and MCPS.