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ERNEST BENN LIMITED PUBLISHERS
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DIRECTORS : SIR ERNEST BENN, GORDON ROBBINS, C. E. HUGHES, T. FISHER UNWIN, A. D. MARKS, J. A. BENN
Telegrams : Benbrolish, Fleet, London SNS Telephone (ten lines) : City 0244
25th July, 1928.
Dear Dr. Siren,
I have been thinking over very carefully the Income
Tax question raised by you.
The Finance Act passed last year threw upon publishers
the burden of deducting Income Tax from royalties payable
to an author who resides outside the United Kingdom.
Every penny of the money so deducted has to be accounted
for am paid over by the publisher to the Inland Revenue
Authorities here. This Act while so doubt successful in
raising additional revenue for the Government here, has
thrown upon publishers a very considerable additional
burden of work for which they do not and cannot get any
recompense.
The basis of payment suggested by Mr. Nathan in his
letter to you, which I return herewith, does not seem
feasible to us. There are two fundamental objections,
viz:
A. We question very much, with all due respect to
Mr. Nathan's opinion, whether such an arrangement
(which would produce to the author an amount varying
with the exact number of copies sold) would be
considered by the Inlånd Revenue Authorities as a
genuine lump sum payment. In our opinion payments
made periodically in the way suggested, and dependent
in amount upon the number of copies sold during a
period preceding such payment, would be held a (rather
thinly) disguised royalty payment and as such liable
to Income Tax.

B. The deposit by us of a sum of £950. in the
hands of a third party on delivery of the complete
material for the book would involve a lockup of
capital which would be quite unjustifiable from
our point of view, and would in effect be tantamount
to paying three years royalties in advance.
An outright lump sum payment by us to you for your
rights in the book would not be liable to tax, and if you
care to put forward any suggestion on this basis I should
be pleased to give it my consideration. «As at present
advised, however, I must make it quite clear that any such
lump sum payment would have to be unconditional and in no
Na variable according to the number of copies actually
sold.
An alternative basis for payment which we might discuss,
if you wish, although it has not the advantage of wholly
relieving you from Income Tax as in the case of a lump sum
payment, is the fixing of a larger sum than we have agreed
upon to be paid$ ö you by way of expenses in connection
with the photographs that you supply and a reduction in
the rate of royalty to correspond. The only other suggestion
which occurs to me at the present time is that you should
arrange for publication of the book in America, in which case
we should be prepared to consider the purchase of sheets for
an English edition. Here again, however, I think I am right
in saying that you would find your royalties subjected to an
American tax of 574 on the royalties paid to you.
Yours Nra€Tg