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Where Taxpayers and Advisers Meet

Vat registration for royalty payments

Posts: 1
Joined: Sun Feb 10, 2019 4:50 pm

Vat registration for royalty payments

Postby DOM441971 » Sun Feb 10, 2019 4:59 pm

Hi, I am a digital artist who receives royalty and advance payments from my agent. I have a contract with them and they do all the marketing and selling of my work. My earnings have gone above the threshold. Do I need to register for VAT, even though I don't buy or sell any goods myself. Many thanks

Trevor S
Posts: 29
Joined: Tue Jan 01, 2019 12:37 am

Re: Vat registration for royalty payments

Postby Trevor S » Sun Feb 10, 2019 11:33 pm

I'm assuming that the agent is just acting as an agent ... In other words, they do not at any stage own your work, but merely act as an intermediary between you and the buyers?

If so, you become liable to register for VAT when the sales exceed the threshold. Assuming that the agent deducts some form of commission, this will be earlier than the point at which your earnings exceed the threshold. You will also need to declare VAT on the full sale price, not just the element that the agent pays over.

You say that you don't buy any goods yourself, but presumably you need some equipment to produce your work? As a VAT registered business, you would be able to reclaim the VAT on those costs. Also your agent's commission charges would be VATable if their total income (i.e. from everyone that they represent) exceeded the VAT registration threshold. If they are accounting for VAT on their commission, they could issue with a document which would allow you to reclaim that VAT.

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