Richard & Judy:
SOME of you may have been alarmed by The Sunday Times article of June 4 on Richard Madeley and Judy Finnigan, also know as TV presenters Richard and Judy. The piece suggested that HM Revenue and Customs (HMRC) was denying authors, footballers and TV presenters the right to treat commission paid to their literary agent as a tax-deductible business expense.
The article also implied that authors might have to cough up six years of back taxes on agents' commissions that appear already to have been accepted as business expenses by the tax people.
But self-employed authors have no cause for alarm. The Society of Authors notes that the report seems to have arisen from Revenue and Customs challenging certain business expenses specific to Richard and Judy. No decision by Revenue and Customs' Special Commissioners has yet been published as we go to press, so it's very difficult to tell what legal arguments the case may centre on, and whether they will set a precedent for other writers. Several top accountants consulted by the Society of Authors felt that the question of agents' fees is likely to be linked in some way to matters of employment, as it is accepted that - for most authors - agents' commission is a tax-deductible expense if it is incurred "wholly and exclusively" in the course of their activities as self-employed professionals.
No authors' accountants have ever had trouble deducting agents' commission, and a change in Customs and Revenue policy would "almost certainly require" a change in the law.
For updates on this case see the Society of Authors website: www.societyofauthors.org