Jo As Sue says this payment is derived from the contract and therefore taxable. However, if the individual is no longer in employment I reckon you could avoid payroll and pay it gross. The professor would then be responsible for declaring the payment in his tax return. Jim ________________________________ From: Payroll administration mailing list [mailto:[log in to unmask]] On Behalf Of Fisher, Sue Sent: 19 October 2010 16:18 To: [log in to unmask] Subject: Re: Royalty fees Jo, All Royalty payments are taxable, HMRC associate these payments with self employed individuals. Anyone in receipt of a Royalty who is in the employ of the organisation making the payment could go through the payroll. Regards Sue Fisher Payroll Manager T. 01707 284646 F. 01707 284934 From: Payroll administration mailing list [mailto:[log in to unmask]] On Behalf Of Brewin Joanne Sent: 19 October 2010 15:24 To: [log in to unmask] Subject: Royalty fees Dear All The University is going to pay a 'patent royalty' to an emeritus professor on profits made by the University on an invention developed by the professor when he was an employee of the University. Does any know off hand if this payment is taxable? Kind regards Jo Jo Brewin Payroll Manager The University of Northampton [log in to unmask] 01604 892796 This e-mail is private and may be confidential and is for the intended recipient only. If you are not the intended recipient you are strictly prohibited from using, printing, copying, distributing or disseminating this e-mail or any information contained in it. We virus scan all E-mails leaving The University of Northampton but no warranty is given that this E-mail and any attachments are virus free. You should undertake your own virus checking. The right to monitor E-mail communications through our networks is reserved by us.