Retired musician has always been UK resident. But he has failed to disclose his "overseas" royalties owing to confusion of old age and bad communication.
He has formerly been a self-employed musician and also employed by the BBC and ITV as a musician. The self-employment ceased around 15 years ago.
He receives royalties in his retirement which derive almost entirely from his old self-employment. They have ALWAYS been entered in box 17 Page TR 3, with a small deduction in box 18 for accountancy.
He also receives music royalties from a UK music licensing company for overseas broadcasts etc. of his music which have been omitted from his tax return for around 6 tax years due to an understandable confusion.
HMRC say the overseas royalties are overseas income, with a higher penalty charge for non-disclosure. However, these royalties are derived from the old UK self-employment, and would have been included within the UK musician self-employment accounts had any royalties been received prior to cessation.
I have read HMRC Notes for the 2018/19 tax return and am still confused. The HMRC SA150 (Tax Return) Notes indicate that post-cessation receipts should be entered in box 17 on Page TR 3. However, the HMRC SA106 (Foreign) Notes very briefly imply that overseas royalties are entered in boxes 8 & 9 on (Foreign) Page F 3.
To my mind, the "overseas" royalties are post-cessation receipts of a UK business, and should attract a lower penalty charge. But if the royalties should go on the Foreign pages then they will presumably be liable to the higher penalty regime.
A main UK tax guide indicates that royalties from a former profession may be chargeable as post-cessation receipts. That being the case, why are they then treated as foreign income.
