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Royalties on book - tax question/

#1 User is offline   Othere 

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Posted 30 May 2018 - 05:17 PM

Hi :headbang: I helped a friend with a book a few months back and now I am getting royalty cheques for being a co-author. I only work part time so this is concerning - I am extremely close to the personal allowance amount and would rather not push myself over it. Should I be concerned about putting my income under the 20% tax band or will it not affect me? I don't have the slightest clue about how it all works. This salary tool says I make less than £100 under the personal allowance. If the cheques count as income the same as my job how do I pay tax on them? Hope someone can help me out.

Thanks
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#2 User is offline   worry 

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Posted 30 May 2018 - 07:49 PM

This is how they took down Al Capone.
They came with white hands and left with red hands.
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#3 User is offline   Macros 

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Posted 30 May 2018 - 08:00 PM

as far as I know* this is a seperate income. technically you should be registered as self employed as well as paye on your part time job.

I recommend registering yourself, its free afaik. then keep a close tally of all royalties recieved, come the end of your tax year you will have to do some accounting to see where you are at.
this way your part time job will not be affected at all, you will only be taxed on the monies that are actually over and above the threshold (I forget the numbers)
so lets say the threshold was 10k, you earn 9.5 in your part time job. have paid no tax in the tax year. thats fine.
you have also received £1300 in royalties. this means there is tax due on £800 of your entire income. but you can pay at the end of the tax year as the monies over the threshold were seperate from your PAYE.

this is all assuming you are in the Uk, and I have the faintest idea what I'm talking about.


now this is me saying this having no idea if royalties work differently than me (as a self employed tradesman) getting paid for doing a job and paying the tax I owe at the end of each year.


Also it should be noted that Macros is not an accountant


*I may not know very much
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#4 User is offline   Mezla PigDog 

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Posted 31 May 2018 - 06:31 AM

Pretty sure Mac is right. Self-assessment tax return at the end of the year. Just keep tabs on what you've been getting. Listen to commercial radio and you will be reminded when the tax return is due!

Also not an accountant and never not been PAYE.
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#5 User is offline   Macros 

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Posted 31 May 2018 - 09:04 AM

Also keep any reciepts you think can be in anyway construed as a book expense, this will help keep any tax bill down
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#6 User is offline   Aptorian 

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Posted 31 May 2018 - 09:15 AM

I am definitely an accountant and I say you should hide the money in the Caymans.
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#7 User is offline   Cause 

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Posted 31 May 2018 - 09:35 AM

Not an expert (and wrong country but my system is based on yours) but paying more tax is never a bad thing. You will never come away with less then you did before by my understanding. You will only pay tax on that amount that is now above the threshold. Your total earning will be more.

What you should try for though is to find something that is a tax write off though to keep the money and still be under the tax threshold. Though if it were easy everyone would do it.
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#8 User is offline   Morgoth 

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Posted 31 May 2018 - 10:08 AM

Also, it is advantageous to specify which country you're working in, as contrary to popular knowledge, tax regulations varies depending on country. However, there's only one good advice to give in situations like this, and that is not to ask tax questions on a book forum on the internet, and heaven forbid you base your decisions on the words of Mat.
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#9 User is offline   Aptorian 

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Posted 31 May 2018 - 11:12 AM

Disregard Morgoth's lies. If you contact me via PM I will forward you a bank account number and I will make all the problems go away.
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#10 User is offline   Gintokian 

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Posted 31 May 2018 - 01:16 PM

So I actually am an accountant (a Canadian one though) so it may not be exactly the same but the way it works here is you don't have to worry about paying tax throughout the year on it. When you file your tax return there should be a section for royalties separate from your employment income. There will be a line for expenses related to the royalties as well if you have any that can be deducted.
If your combined income is over your personal allowance then you will have to pay tax on that portion. After you've filed your taxes there will be an amount payable, just make sure you pay this amount in the timeline required and you're good. So you don't have to worry about it throughout the year but after tax season you may have to pay a bit.
My recommendation is to keep records of all your royalties so you know how much you've received total, keep some money aside in case you go over the allowance and have to pay, and as mentioned above, if you have any related expenses make sure you keep receipts and records so you can use it on your tax return as a deduction.


Good luck! Hope this isn't all too taxing on you.
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#11 User is offline   Macros 

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Posted 31 May 2018 - 01:31 PM

Yeah that sounds in line with how I thinking will work in the UK.
Get yourself a UTR number and register for self assessment online.
This will not affect your work or its tax obligations.
As gink says, bank 20/30% of your royalties incase you end up having to pay tax on them.
When it comes round to April again give us a shout and I can talk you through self assessment, it's quite easy
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#12 User is offline   LinearPhilosopher 

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Posted 31 May 2018 - 01:40 PM

View PostOthere, on 30 May 2018 - 05:17 PM, said:

Hi :headbang: I helped a friend with a book a few months back and now I am getting royalty cheques for being a co-author. I only work part time so this is concerning - I am extremely close to the personal allowance amount and would rather not push myself over it. Should I be concerned about putting my income under the 20% tax band or will it not affect me? I don't have the slightest clue about how it all works. This salary tool says I make less than £100 under the personal allowance. If the cheques count as income the same as my job how do I pay tax on them? Hope someone can help me out.

Thanks


as a canadian tax nerd, i can tell you you should find an accountant in your country and get a free consultation.

I am not even going to start with what would happen in canada and that is likely to be 100% inaccurate.
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#13 User is offline   Morgoth 

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Posted 31 May 2018 - 01:48 PM

View PostLinearPhilosopher, on 31 May 2018 - 01:40 PM, said:

View PostOthere, on 30 May 2018 - 05:17 PM, said:

Hi :headbang: I helped a friend with a book a few months back and now I am getting royalty cheques for being a co-author. I only work part time so this is concerning - I am extremely close to the personal allowance amount and would rather not push myself over it. Should I be concerned about putting my income under the 20% tax band or will it not affect me? I don't have the slightest clue about how it all works. This salary tool says I make less than £100 under the personal allowance. If the cheques count as income the same as my job how do I pay tax on them? Hope someone can help me out.

Thanks


as a canadian tax nerd, i can tell you you should find an accountant in your country and get a free consultation.

I am not even going to start with what would happen in canada and that is likely to be 100% inaccurate.


This is the only correct answer.
Take good care to keep relations civil
It's decent in the first of gentlemen
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#14 User is offline   Gintokian 

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Posted 31 May 2018 - 02:14 PM

View PostMorgoth, on 31 May 2018 - 01:48 PM, said:

View PostLinearPhilosopher, on 31 May 2018 - 01:40 PM, said:

View PostOthere, on 30 May 2018 - 05:17 PM, said:

Hi :headbang: I helped a friend with a book a few months back and now I am getting royalty cheques for being a co-author. I only work part time so this is concerning - I am extremely close to the personal allowance amount and would rather not push myself over it. Should I be concerned about putting my income under the 20% tax band or will it not affect me? I don't have the slightest clue about how it all works. This salary tool says I make less than £100 under the personal allowance. If the cheques count as income the same as my job how do I pay tax on them? Hope someone can help me out.

Thanks


as a canadian tax nerd, i can tell you you should find an accountant in your country and get a free consultation.

I am not even going to start with what would happen in canada and that is likely to be 100% inaccurate.


This is the only correct answer.


I do agree with this as well, most banks can give you advice as well.
Although it still is a good idea to keep some savings for paying taxes for this type of income as well, since no tax is being taken off your pay chances are you will have to pay a little at year end.
In the language of flowers corn stands for trust.
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#15 User is offline   worry 

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Posted 31 May 2018 - 09:11 PM

Sorry to be the one to tell you guys, but Othere won't be clarifying his situation any time soon. He's already been picked up by the feds for tax evasion.
They came with white hands and left with red hands.
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#16 User is offline   LinearPhilosopher 

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Posted 06 June 2018 - 02:47 AM

View PostGintokian, on 31 May 2018 - 02:14 PM, said:

View PostMorgoth, on 31 May 2018 - 01:48 PM, said:

View PostLinearPhilosopher, on 31 May 2018 - 01:40 PM, said:

View PostOthere, on 30 May 2018 - 05:17 PM, said:

Hi :lol: I helped a friend with a book a few months back and now I am getting royalty cheques for being a co-author. I only work part time so this is concerning - I am extremely close to the personal allowance amount and would rather not push myself over it. Should I be concerned about putting my income under the 20% tax band or will it not affect me? I don't have the slightest clue about how it all works. This salary tool says I make less than £100 under the personal allowance. If the cheques count as income the same as my job how do I pay tax on them? Hope someone can help me out.

Thanks


as a canadian tax nerd, i can tell you you should find an accountant in your country and get a free consultation.

I am not even going to start with what would happen in canada and that is likely to be 100% inaccurate.


This is the only correct answer.


I do agree with this as well, most banks can give you advice as well.
Although it still is a good idea to keep some savings for paying taxes for this type of income as well, since no tax is being taken off your pay chances are you will have to pay a little at year end.


even within the canadian tax system there are tons of scenarios where this woulnd't be true.
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