Authors hit by new fears over taxation charge

Writers’ ability to average out their earnings over a number of years could be abolished, according to new tax system proposals.

The Office of Tax Simplification’s new review of tax reliefs listed authors’ ability to average out their profits between consecutive years as one of the “Reliefs to Abolish”. The current scheme benefits authors whose income fluctuates between different tax bands in different years as, for example, one year they have little income due to research or writing a book, then the next he or she receives a large advance for their work. By averaging out the income, the author can in some cases escape a sizeable tax bill.

The review document states: “Creative artists are, subject to certain conditions, able to average their profits and consequently their tax liability, thus enabling better management of their cash flow . . . We do not think there is sufficient justification as to why this sector should receive favourable tax treatment.”

Mark Le Fanu, general secretary of the Society of Authors, said the society opposed changes to the tax system: “It is based on the principles applied to farmers, who can average out their earnings over consecutive years, should they have a good year and a bad year. It’s an important concession to authors with fluctuating incomes.”