TAXATION OF ADVANCE PAYMENTS ON ROYALTIES

[IanMcP]

I am currently negotiating a publishing deal on some music I have written.

I am likely to receive a large lump sum, as an "advance" on future royalties, potentially propelling me into the 50 per cent tax bracket. Yet, in practice, the advance is there to provide me with income over several years.

Is there any scope for spreading the advance over a number of tax years? Or will I be liable to income tax on the whole payment in the year I receive it?

Ian

[pawncob]

Look at items one and three on this page. You can average your income over more than one year if needed.

http://search.hmrc.gov.uk/kb5/hmrc/hmrc/results.page?qt=authors+income