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.

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



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.






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 Brewin

Payroll Manager

The University of Northampton

[log in to unmask]

01604 892796



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