hi,
i am an independent author, i.e. i write my fiction and publish myself. i sell my digital books on Amazon,Apple Books and a few others.
i established my ltd company in Feb 2016 and did not have any significant earnings until Oct 2016, even though i have been writing since 2014.
i own the copyright to my books and my ltd company receives the income from Amazon etc, from which i draw dividends. the ltd company is basically my accounting vehicle for my publishing business.
i have come to know only recently that i need to assign the copyright of my books to my ltd company otherwise HMRC might view this my current setup as a tax evasion setup.
i have an accountant and have asked him but he is not an expert in this space.
will appreciate any advice i get on here.
for reference, the sales for my ltd company are £50-100k a year.
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Replies (3)
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Id get a better accountant. "Who owns the copyright?" ought to be one of the first questions they asked you, just after "can I have some ID?" and "how do you keep your records"
You have now got a 3+ years of muddle to sort out.
There are a couple of ways of dealing with in terms of licensing/rental and outright sale but what you need is a professional not someone just throwing the numbers you give 'em into a spreadsheet no questions asked.
you and the company are related parties, so if you do sell the copyright (an intangible asset) it would be at market value i.e. the amount a third party would pay for the copyright. This would be taxed on you as a capital gain.
It is a disposal for CGT, but proceeds chargeable are reduced by any amount brought into account for income tax. So you should mention that tax charge too.