Do Authors Pay Tax on Book Royalties in the UK? (2026/27)

The full picture: see the UK self-publishing legal & tax hub for ISBNs, legal deposit, HMRC and VAT in one place.

Last reviewed by Robert Prime, 12 October 2026. Rewritten that day from gov.uk and legislation.gov.uk: Income Tax rates, self-employed National Insurance rates, the trading allowance, Self Assessment deadlines, allowable expenses, ITTOIA 2005 section 579 and Amazon’s KDP tax withholding page. General information, not tax advice; an accountant can look at your own figures.

Quick Answer: Yes. Book royalties are taxable income in the UK. If writing is a business, you are self-employed: your first £1,000 of gross trading income each year is tax-free under the trading allowance; above that you pay Income Tax on your profit after expenses, plus Class 4 National Insurance once profits pass £12,570. You report it through Self Assessment, file online by 31 January and pay by the same date. Rates below are for 2026/27 (6 April 2026 to 5 April 2027).

Table of Contents

• Are book royalties taxable?
• Is writing your business or a sideline?
• The £1,000 trading allowance
• How much tax you pay: 2026/27 rates
• Worked examples
• Expenses you can claim
• Registering and deadlines
• Making Tax Digital
• Amazon KDP and US tax
• VAT is a separate question
• Common mistakes
• Frequently asked questions

Are book royalties taxable?

Yes. Section 579 of the Income Tax (Trading and Other Income) Act 2005 says: “Income tax is charged on royalties and other income from intellectual property”, and the intellectual property it lists includes “copyright”. That covers the royalty from Amazon KDP, IngramSpark, Draft2Digital, a traditional publisher, or anyone else who pays you for your book.

How it is taxed depends on one question: is writing a business for you, or not?

Is writing your business or a sideline?

gov.uk’s working for yourself page says you are likely to be trading if you “sell regularly to make a profit” or “make items to sell for profit”, and probably running a business if you “take responsibility for its success or failure” and “can decide how, where and when you do your work”.

An author who publishes books, sets prices and markets them to make money usually fits that description. Your royalties are then self-employment income, and you work out tax on your profit: royalties and other book income, minus allowable expenses.

If you are not trading (say, a one-off book you wrote years ago that still pays a little), the royalties are still taxable as other income under s.579; you just cannot treat them as a business. gov.uk says to contact HMRC if you are not sure whether you are trading.

The £1,000 trading allowance

gov.uk’s trading allowance guidance: “The trading allowance is a tax exemption of up to £1,000 a year for individuals with trading income”.

• Gross trading income of £1,000 or less in a tax year: “you do not need to tell HMRC”, unless one of the exceptions on that page applies (for example, you want to claim a loss).
• Gross trading income over £1,000: you must “register for Self Assessment”. You can then either deduct the £1,000 allowance or deduct your actual expenses, not both. gov.uk: “You cannot claim expenses if you use your £1,000 tax-free ’trading allowance’.”
• Non-trading income (the sideline case): over £1,000 up to £2,500, “contact HMRC”; over £2,500, “register for Self Assessment”.

“Gross” means before expenses. £1,200 of royalties and £900 of costs is still over the £1,000 line.

Rule of thumb: if your publishing costs in the year are more than £1,000, claim expenses; if they are less, the allowance usually gives the bigger deduction.

How much tax you pay: 2026/27 rates

Income Tax (gov.uk), England, Wales and Northern Ireland, for 2026/27:

Your Personal Allowance goes down by £1 for every £2 of adjusted net income over £100,000. Scotland has different bands.

Royalties are added to your other income. If a salary already uses up your Personal Allowance and basic-rate band, every pound of book profit is taxed at your top rate.

National Insurance (gov.uk), self-employed, 2026/27:

• Class 4: “6% on profits over £12,570 up to £50,270” and “2% on profits over £50,270”.
• Class 2: if your profits are £7,105 or more, Class 2 “contributions are treated as having been paid to protect your National Insurance record”, so you do not pay them. Below £7,105 you pay nothing but can choose to pay voluntarily, at £3.65 a week for 2026/27.

Worked examples

Our arithmetic, using the 2026/27 rates above, for authors with no other income unless stated:

• £800 of royalties, small costs. Under the £1,000 trading allowance. No tax, and no need to tell HMRC unless an exception applies.
• £6,000 of royalties, £2,500 of costs, no other income. Profit £3,500. That is inside the £12,570 Personal Allowance, so no Income Tax and no Class 4. You still register and file a return, because gross income is over £1,000.
• £6,000 of royalties, £2,500 of costs, plus a £40,000 salary. The salary uses the Personal Allowance, so the £3,500 profit is taxed at 20% basic rate: £700 Income Tax. Class 4 is worked out on self-employed profits alone, which are under £12,570, so none is due.
• £30,000 of royalties, £8,000 of costs, no other income. Profit £22,000. Income Tax: 20% x (£22,000 - £12,570) = £1,886. Class 4: 6% x (£22,000 - £12,570) = £565.80. Total about £2,452.

Expenses you can claim

gov.uk’s allowable expenses are “costs related to business purchases”. For an author, the categories on that page that usually apply are:

• office costs, for example stationery or phone bills;
• advertising or marketing, “for example website costs”, which covers Amazon and Facebook ads and your newsletter service;
• subscriptions, “for example subscriptions to trade or professional journals”;
• financial costs, “for example insurance or bank charges”;
• travel costs for business journeys;
• training courses related to your business.

Most authors also claim the costs of producing the book itself: editing, cover design, formatting, ISBNs and proof copies. gov.uk says that if you are “not sure whether a business cost is an allowable expense”, contact HMRC. Our UK author tax checklist goes through the author-specific list and the records to keep.

Expenses cannot include “money taken from your business for personal use”, and you cannot claim them at all in a year you use the trading allowance.

Registering and deadlines

From gov.uk’s Self Assessment deadlines page, for the 2025/26 tax year (6 April 2025 to 5 April 2026):

Register online through gov.uk’s Self Assessment registration. If you register after 5 October, gov.uk says HMRC will give you a filing deadline “3 months from the date on the letter or email”, but you “must still pay the tax you owe by 11:59pm on 31 January 2027”.

Making Tax Digital: do authors have to use it?

Making Tax Digital for Income Tax means keeping digital records and sending HMRC updates through compatible software every quarter, as well as filing a tax return. It depends on your income before expenses. From HMRC’s guidance, read on 5 November 2026:

For most authors the middle row is the one to check now, because your 2025/26 return is due by 31 January 2027.

• What counts. “Qualifying income is your total income from self-employment and property”, before expenses (HMRC). Add your book business and any other self-employment and rent together.
• What does not count. “All other sources of income”, including a PAYE salary, dividends, pensions and “your share of profit from a partnership as an individual partner”.
• The trap for authors. It uses turnover, not profit. £31,000 of royalties and £25,000 of ad spend, printing and editing is over the £30,000 line, even with a small profit.
• A sideline. If your royalties are not self-employment income, they may not count at all. HMRC’s page does not mention royalties by name, so use its checking tool or ask your accountant.
• Nobody may tell you. HMRC writes to people it identifies, but “If you did not receive a letter, it is still your responsibility to check”.
• Partnerships. They will follow “at a later date”. The current dates are for sole traders and landlords.

If you are in, these are the quarterly update deadlines on standard periods:

You can choose to leave after your income falls below the threshold “for 3 tax years in a row”, and some people are exempt, for example if you are digitally excluded. Our UK author tax checklist has the records to keep from the start.

Amazon KDP and US tax

Amazon’s tax withholding page: “Royalty payments for eBook sales on Amazon.com and print book sales on Amazon.com, Amazon.co.jp, Amazon.com.au, and Amazon.ca are subject to 30% US tax withholding”. You “may be eligible for a reduced rate of US tax withholding if your country of permanent residence has an income tax treaty with the United States”, claimed through the W-8 form in your KDP tax profile.

Two things to know:

• The form expires. Amazon: “Your W-8 will expire on the last day of the third succeeding calendar year from the date signed”, and if it lapses your rate “will default back to 30%”.
• You do not need a US tax number. “If you do not have a US TIN, you may enter the income tax identification number issued to you by the tax authority in your country of residence”.

Our KDP tax interview walkthrough takes you through every field. Whatever Amazon withholds, you still declare the full royalty on your UK return.

VAT is a separate question

Income Tax is about your profit. VAT is about the price of what you sell. Printed books and ebooks are zero-rated in the UK, and you only have to register for VAT once taxable turnover goes over £90,000 in 12 months. The details, including why journals and audiobooks are different, are in VAT on ebooks and print books for UK self-publishers.

Common mistakes

Thinking small royalties do not count. Up to £1,000 gross trading income a year, the allowance covers you. Above it, you register, even if your profit is tiny or a loss.

Forgetting royalties on top of a salary. A salary uses your Personal Allowance first, so book profit is taxed from the first pound.

Claiming the allowance and expenses together. gov.uk is clear that it is one or the other.

Letting the KDP W-8 expire. Your US withholding goes back to 30% without warning.

Using last year’s rates. Rates and thresholds can change each year. The figures here are for 2026/27, checked on 12 October 2026.

Frequently asked questions

Do I have to pay tax on book royalties in the UK?

Yes. Income Tax is charged on royalties from copyright (ITTOIA 2005 s.579). If your gross trading income is £1,000 or less in a tax year, the trading allowance covers it.

Do I need to register as self-employed to sell books on Amazon?

If writing is a business and your gross trading income in a tax year goes over £1,000, yes: register for Self Assessment. Below £1,000 you usually do not need to tell HMRC.

Is the £1,000 trading allowance on profit or income?

On gross income, before expenses. If you claim it, you cannot also claim expenses.

Do I pay National Insurance on royalties?

If you are self-employed, Class 4 at 6% on profits between £12,570 and £50,270 and 2% above that, for 2026/27. Class 2 is treated as paid once profits reach £7,105.

Does Amazon take UK tax off my royalties?

No. Amazon may withhold US tax on some sales, but UK Income Tax and National Insurance are yours to report and pay through Self Assessment.

When is the deadline to pay tax on my 2025/26 royalties?

31 January 2027, for both the online return and the payment.

Should I use a limited company?

Usually not at first. Our limited company vs sole trader guide explains when it starts to be worth looking at.

Final thoughts

Royalties are income, and once they pass £1,000 a year they need a Self Assessment return. For most part-time authors the bill is small or nil once expenses and the Personal Allowance are counted, but the return still has to go in. Keep a simple record of every payment and every cost as it happens, register by 5 October after your first year over the line, and keep your KDP tax form current.

For the step-by-step version, use the UK author tax checklist.

— Robert publishing.co.uk

Tax is one half of an author’s paperwork. The other half is who owns the book and what you are obliged to file. The UK Author Legal Pack covers that side: copyright page, contracts that transfer copyright, permission letters, ARC terms, legal deposit. It contains no tax documents; this page is the better guide for those. £29.