Authors Expenses

The main cost for most Authors is their agent’s commission. An author earns £10,000 and has agents commission of £1,500. The £1,500 is treated as a business expense and will reduce the amount of profit. The profit in this case would be £10,000 - £1,500 = £8,500 taxable income. Many authors only include the amount after agents fees as income on their tax returns, this is incorrect and could spark an enquiry!

It is important to know what you can and can’t claim as a business expense as in the case of an HMRC enquiry you will need to be able to justify the claims made. Record keeping is also very important, and we usually recommend the use of a bookkeeping package as this can help when dealing with HMRC.

In some cases below, some costs may have an element of private use and it is important to be able to evidence how you have arrived at the business percentage.

Use of Home – Where a room in your home is used as an office/study and is used in your capacity as an author, a claim can be made against the costs associated with this room. The typical costs that can be claimed include rent or mortgage interest, council tax, ground rent, service charges, buildings and contents insurance, cleaning, repairs and decorating. You can also claim for light and heat although you will need to factor in the number of hours worked.

To avoid any issues, we do not recommend that a room is exclusively used for business, HMRC could reduce the private residence exemption for capital gains tax purposes. This can easily be achieved by keeping private items in the room, for example a spare bed or a spare wardrobe.

Research – As an author you are likely to incur some expenditure researching a book that you are writing. This could be you traveling to a location set in your book, reading books and papers or watching films and TV shows to gather inspiration.

List of Business Expenses for Authors:

• Accountancy fees and legal fees.
• Advertising
• Agents’ fees and commissions
• Bank charges and interest, leasing or hire charges
• Books, magazines and newspapers
• Car running costs
• Courses and conferences
• Photographs and drawings
• Printing, postage, stationery, and photocopying
• Professional subscriptions
• Repairs and maintenance of equipment
• Research assistance and materials
• Secretarial assistance
• Software costs
• Theatre and cinema tickets
• Telephone and broadband
• Television licence and digital subscriptions
• Travelling and accommodation
• Use of home as office

Equipment used for business purposes that has a life of more than 1 year qualifies for capital allowances. For example a computer, mobile phone, printers, TV, car, office equipment and furniture.