Take action now to avoid withholding tax on YouTube income from June 2021.
From 1 June 2021 creators in the YouTube Partner Program receiving income from viewers in the US may be subject to tax being withheld on payments from YouTube due to changes in US tax law.
However, UK resident creators will be exempt from such US withholding taxes. This applies to both UK resident individuals and companies. This means you will continue to receive your royalty income from YouTube in full. This income will only taxable in the UK, as usual.
You will need to apply for the exemption by notifying Google of your UK residency or your company’s UK residency status by Monday 31 May 2021 in order to avoid withholding tax being deducted from your YouTube income.
Who will be affected?
This will affect creators in the YouTube Partner Program (YPP) receiving income from viewers in the US from:
- Ad views
- YouTube Premium
- Super Chat
- Super Stickers
- Channel Memberships
What is tax witholding?
Simply put, tax withholding is when taxes are deducted at source from your income so that they can be paid over to a government to satisfy your tax liability. Under US tax law Google is a withholding agent and is therefore required to comply with US tax law. As a result, Google need to withhold taxes on relevant YouTube earnings, where appropriate.
What action should you take now?
If you are a UK resident creator, you will be able to claim the exemption by preparing and submitting the relevant W-8 BEN/E form which can be done through your AdSense account. The forms will provide Google with all the necessary information needed to ensure you do not suffer from any tax withholding.
We strongly recommend that this is completed as soon as possible.
If your relevant tax information is not provided by 31 May 2021 Google may be required to withhold tax using the maximum tax rate.
Google have provided the following instructions to assist you in submitting the relevant form and claiming the withholding tax exemption:
- Sign in to your AdSense account.
- Click Payments
- Click Manage settings
- Scroll to “Payments profile” and click edit next to “United States tax info”
- Click Manage tax information
- On this page you’ll find a guide that will help you to select the appropriate form for your tax situation
As the changes are being introduced from 1 June 2021, we strongly recommend that this is completed as soon as possible.
Get some help
If you have any questions regarding the changes or require assistance with completing the relevant forms, please get in touch with one of our team.