The HMRC Music Royalties Team has been writing out to individuals it suspects have not declared all of their music royalty payments.
The letters, titled Income received from music royalties is taxable state:
We are writing to you because our records suggest you have received music royalty income payments for one or more years. These payments are taxable and you should declare any payments received on your tax return.
It’s your responsibility to make sure that your tax return is correct. We want to give you the opportunity to correct any errors that you may have made and to avoid them in the future.
What you need to do
Please check that the entries on the tax return are complete and correct and that you have declared any income from music royalties.
If you are satisfied that your tax returns are correct you do not need to take any further action.
The letters then go on to give guidance on how to amend the 2015/16 tax return or to make a disclosure for earlier years, using a code, via the digital disclosure service.
We have previously drawn attention to the information HMRC has been gathering over recent years surrounding ‘entertainers’, such as after dinner speakers from sport and industry backgrounds, as well as comedians. Agents representing such entertainers have been served with information notices by HMRC, requiring the submission of payment details from such engagements.
However, it is worth noting the fishing element to this exercise. Recipients of these latest letters may well have disclosed their royalty payments within their overall turnover declaration for 2015/16 and HMRC may simply be unaware the payments have already been accounted for.
Author: Guy Smith, Head of Technical Research