Income Tax Act 2007 (c. 3)

Part 15 Deduction of income tax at source

Chapter 8 Chapters 6 and 7: special provision in relation to royalties

Discretion to make payments gross

916 Duty of payee to notify if payment not exempt

(1) This section applies if before a payment of a royalty is made, the company beneficially entitled to the income in respect of which the payment is to be made—

(a) believed that the payment was exempt from income tax as a result of section 758 of ITTOIA 2005 (exemption for certain interest and royalty payments), but

(b) has subsequently become aware that any of conditions A to C in that section have ceased to be met.

(2) The company must without delay notify—

(a) an officer of Revenue and Customs, and

(b) the company which is to make the payment.