Reasons to be cheerful…not!
Life in General|Some of my reasons are things in progress that just rear their ugly heads on occasion but then turn my emotions upside-down and inside-out over several days at a time. One of those irritations include the fact that my father’s ’simple’ estate still isn’t finalised. This creates much intermittent gnashing of teeth, as you can imagine, but I signed some more forms the other day and am beginning to wonder if if there’s a bright light at the end of a very long tunnel. My father would have got the joke there and laughed. He wouldn’t have been amused to know it’s taken so long to sort out his personal finances etc. This is just one of many irritations I’m having to deal with this year and typically they come all at once.
There is another reason that my releases will be scarce. As you can imagine there are ‘behind the scenes’ occurrences, some of which one anticipates, such as edits, line edits, proofreading, production delays etc. What I didn’t anticipate was the necessity to sort out a US tax number this year, and while it isn’t always possible to explain what happens between publisher, writer, and other outside sources due to privacy issues, I feel I have to inform you of these circumstances out of politeness so that my readers understand the difficulty I’ve had to overcome.
The US and UK have a tax treaty. What this means is that a UK citizen does not have to pay tax on earnings in the US. While this may seem unfair to some, consider that the UK writer loses half their income on the exchange rate. To lose another 30% would be crippling, indeed. I actually worked out that if the UK writer had to pay 30% US tax, then lost half their earnings as they do on the current exchange rate, pay bank charges and then pay tax in the UK, for every $100 in royalties they would actually receive $30 or less (approximately £15). Can we all shout OUCH!
Up until recently, the IRS accepted the UK National Insurance code as proof of UK citizenship, but no longer. The UK writer has to apply to the IRS for an Individual Taxpayer Identification Number or ITIN. I’m not talking about someone who has written a short story and maybe earned $5 or $10 from a magazine. I’m talking about a writer earning any sort of regular income. Without the ITIN code, the publisher should withhold 30% of royalties to pay US tax. Some writers actually cannot be bothered to apply for this number and accept paying the tax because their royalties to date don’t warrant the cost or hassle.
To apply one needs certified or notarised copies of certain documents, such as your passport. Depending on what form of identification you choose, and what route you decide to take to obtain the copies, it can be a costly business. The writer then sends this with a form to the IRS. Once they issue an ITIN number, the writer sends this with another form to his or her publisher and then doesn’t have to pay US tax.
However, this all takes time. The IRS alone say to allow up to eight weeks to process the application. Consider it can also take up to two weeks to send a letter to the states and to receive one. In addition, there’s been several weeks of running around to obtain the necessary documents even before a writer can send them. This has cut into my writing time and until I receive my ITIN number I feel unable to submit any new (or not ‘already in progress’ for submission) works to the US market, which in turn means that I may not sub more work until the end of the summer and then, even if accepted, it may be another three months before the work finds a slot. There’s nothing I can do about this delay. It’s outside of my control and I can only ask my readers to bear with me. Thank you.
As to the fun of actually finding the right information and dealing with departments over here just to get the paperwork you need even before you can send it, that’s what kept me busy for a large part of the start of the year, but that’s another story and another blog.
April 16th, 2008 at 7:15 pm
Wow, I had no idea. This kind of information is great for any aspiring UK authors who want to publish with an American publisher. I never even bother to think about the whole deal you’d need go through. I wish you all the best on this and your personal life.
April 17th, 2008 at 8:53 am
Well, not all US publishers are asking for this yet but it seems that it will become a standard thing. The good thing is that once you have your ITIN number as far as I’m aware you have it for life. Also, you need to write that book and find a publisher before you need to think about this, as you need a letter from them requesting the ITIN in order to apply. So the first piece of advice to any aspiring author is always ‘write, write, write’ and then… oh yeah, write some more.