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Royalties and Tax

Advice on VAT and Withholding Tax in relation to royalties from sound recordings.

Last updated: 07 January 2021

VAT

If you are VAT registered, please supply us with your VAT number and start date, and we will ensure VAT is applied where applicable.  VAT can be paid on payments where the music was used by a licensee based in the UK.  If the royalties are sourced from outside the UK, payments will not have VAT applied.

Withholding Tax (WHT)

Royalties that are sourced from outside of the UK might have withholding tax deducted at source, for example, payments from the USA will have 30% WHT deducted by the music user to satisfy their requirements with the IRS in America.  If your payment has had WHT deducted, you may be able to offset this deduction against your UK income tax.  More information on WHT can be found on the HMRC website.