Income Tax Act 2007 section 908

Royalty payments etc. made through UK resident agents

Section 908 deals with how income tax is deducted at source when royalty payments to non-UK owners are made through a UK-resident agent who is entitled to deduct a commission from the payment.

• When a royalty payment to a non-UK owner is made through a UK-resident agent entitled to commission, income tax is deducted on the net amount (i.e. the payment minus the agent's commission).
• The net amount is also the basis for the collection and reporting requirements under the relevant chapters of the Act.
• If the person making the payment does not know that a commission is payable, or does not know its amount, income tax must be deducted on the full gross payment instead.
• In that case, the statutory return or account of the payment must also be based on the gross amount.

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