My USA company wants to publish a UK author? Taxes? Other problems?
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I've been asked about this one, and I wanted to get the answer straight to them as soon as I could. My company Dam Good Publishing is going to be signing our first author soon, but they are not in the USA, they are in the UK. Will they have to pay US and UK taxes on their books? We will certainly have to do that over here, but isn't that doubling the taxes in a way?

 

I am not sure where to find this answer at, and have looked it up in the search engines with little results. We are beginning our publishing company this year (six months so we have plenty of time to learn everything) and we really need to know the answer.

 

If no one knows, does anyone have the slightest clue where to find the answer?

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Replies
  • I'm no expert, but speaking as an American living in the UK and as an author/publisher in the UK dealing with both US and UK authors---maybe I can help! LOL

    I've been living in the UK for over 5yrs but I must file my US tax return every year because as an American citizen, I must report all worldwide income. The US and the UK have a tax treaty which basically means I need to report my income to both governments. It doesn't mean I'm taxed 2x because I don't EARN enough money that requires my paying taxes in both the US and UK--but I must report my income.

    We are a publisher based in the UK but most of our authors are in the US. We send them their royalty statements, etc., but it is clearly stated in their contract that THEY are responsible for their own taxes and whatever laws they must follow. We don't give them 1099s, etc. They need to do their own paperwork.

    So, taking it on the flip side. You are a US publisher with UK authors. You will need to report any earnings you pay to this UK author to the IRS using whatever form(s) required. You can even send the UK author a copy for their records. But in the UK, they report and collect taxes in a totally different way.

    Taxes in the UK depend on how much you earn over the tax year and are automatically deducted by your employer. There's no mad dash to fill out tax forms by the deadline like in the US. It's already taken care for you. But it sort of knocks the head on getting a tax refund.

    But, if you are self employed...

    My husband and I now work full-time at home running our publishing company and our other business. In the UK we are required to "self-assess" and make payments on our taxes every month, which is like many self-employed people do in the US when they may choose to make payments over the year rather than in a lump-sum in April. Basically, we are now responsible for doing what our employers once did for us.

    I guess what I'm saying is that you should make sure that you keep your records straight and report any money paid when you do your taxes as usual. You are not responsible for the UK author's actions once that money is paid. If he/she doesn't pay their taxes--that's their funeral. As long as you have your records in order, you'll be fine.

    I hope this helps. I'll ask my husband if there's anything I'm missing :)

    But there may be other publishers here dealing with the same thing. They may be able to give you more info too.