Taxation?

[Bryony Marsh]

Hey, friends...

I was just wondering: do we need to declare KDP royalty payments as income? I have this trickle of money coming into my bank account from Amazon, but I seem to recall that it’s taxed at source in the USA. I’m assuming that I don’t need to pay tax again in the UK, therefore. If I’m expected to lose 40% of what remains, well... forget it.

So, I’m seeking financial advice from people I met on the Internet. How much of a cheapskate am I? (If you saw the royalties I’m getting, you’d understand.)

Bx

[superhellkitten]

Hi Bryony,

I have no idea to be honest but if its taxed at source I'm guessing that you wouldn't pay tax on it twice.  However having just read the government advice it looks like you do ... though if it amounts to less that £300 in dividends then you don't have to report on it.

www.gov.uk/tax-foreign-income

Kat

[jessica]

In my other life, I'm a tax attorney in the US. The US and UK have a tax treaty. By and large, you only have to pay tax in one jurisdiction. If taxes were withheld here, you'd receive credit in the UK for taxes paid (and vice versa). You don't get whacked twice. Hope that helps.

[Bryony Marsh]

Thanks, Jessica. 

I'll still have to check in case the sales upon which I have been taxed are only the "dot com" ones, but I think I'm in the clear.

its not like I won't be able to pay a tax bill if presented with one, anyway. Pretty small potatoes!

Bx

[Bryony Marsh]

Just to follow up on this: a long time back I changed my "tax interview" with Amazon such that nothing is withheld in the USA. The income is, therefore, taxable in the UK but I have always been able to absorb it within the tax-free allowances for a small amount of money permitted from work other than your pay-as-you-earn job (or under Schedule D if some of you are self-employed, I guess). It’s been a couple of years now and I haven’t had any nasty surprises yet.