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Where Taxpayers and Advisers Meet

Taxation of Book Royalty Advance

Mikethebook
Posts:38
Joined:Wed Aug 06, 2008 4:09 pm
Taxation of Book Royalty Advance

Postby Mikethebook » Sat Nov 10, 2018 1:37 pm

An amateur writer enters a writing competition and wins a publishing contract with advance royalties, the book to be published two years hence. Obviously, he becomes a professional writer subject to income tax but at what point does he become self-employed and the advance become taxable. Now, when he receives the advance or two years down the road when the book is actually published?

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Taxation of Book Royalty Advance

Postby pawncob » Sat Nov 17, 2018 12:30 pm

This might help@
https://selfpublishingadventures.com/paying-uk-income-tax-on-book-royalties-uk-authors/

Income subject to averaging:
https://www.gov.uk/government/publications/averaging-for-creators-of-literary-or-artistic-works-hs234-self-assessment-helpsheet/hs234-averaging-for-creators-of-literary-or-artistic-works-2018
With a pinch of salt take what I say, but don't exceed your RDA

Mikethebook
Posts:38
Joined:Wed Aug 06, 2008 4:09 pm

Re: Taxation of Book Royalty Advance

Postby Mikethebook » Sat Nov 17, 2018 1:42 pm

Thanks for the links but they don't really address the issue. My question is whether self-employment starts on receipt of a publishing advance or at the point the book is published. I lean towards the latter view since the money received isn't for sales at that time but for sales in the future. But I'm seeking confirmation of this. Averaging is a useful tool but it doesn't help define the date the self-employment begins.


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