How we saved a Hampstead author £13,500 on royalty and advance income
Client J is a successful Hampstead-based author with royalty income from a backlist of books plus a substantial advance for a new title. The advance had landed in a single tax year, pushing them into the additional-rate band, and their previous accountant hadn't considered the timing or the legitimate expenses of a professional writer.
We reviewed the position. We claimed all the legitimate professional expenses - research costs, agent's commission, professional subscriptions, a proportion of home as a study, travel for research and promotion, and accountancy. We advised on the timing of the next tranche of advance to avoid stacking two large payments in one tax year, and made a pension contribution to reduce the additional-rate exposure on the advance year.