Hi there. I was wondering if anyone on this forum knows much about HMRC tax returns, specifically about declaring income received from music royalties. I’ve been a self employed musician/composer for five or six years now and every year since I registered as self employed I’ve been delaying my self employed income and submitting a tax return online via the HMRC website as is the norm.
I do receive some of my income from royalties and I’ve always included that income when I enter my total turnover/earnings. I’ve never found any section on the tax return form that addresses income earned through music royalties or any specific requirement to treat this income as different from any of my other self employed earnings. So I was under the impression that I’ve been declaring all of my income properly and paying the correct amount of tax on it.
However, I received a letter today from the HMRC informing me that:
“We receive information from third party intermediaries who have to provide us with details of music royalty payments paid to individuals and companies. Our records suggest that you may have received these payments for one or more years. These payments are taxable and you should declare any payments received on your tax return.”
It goes on to tell me that I need to:
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.”
As I say, I was under the impression that I was declaring all my income from royalties.
I can only think that a) I’m mistaken in thinking that income from music royalties are declared in the same way as other self employed income and there’s something I’ve missed. Or:
b) This is just a standard letter they send out to anyone who’s in their records as receiving income from music royalties and I don’t need to worry as I have been declaring this income properly.
Obviously I’m hopeful that it’s the latter! I went back over my last tax return and again, I couldn’t find any opportunity on the form to specifically declare income from music royalties. There are some special categories you have to declare like, “Did you receive any income from UK property” etc but nothing to do with musical royalties as far as I can see.
But obviously receiving this letter made me feel a little anxious!
Can anyone shed any light on this matter?