Changes to your YouTube terms and conditions: tax withholding explained
Creators by now should have received communication from YouTube broadly stating that certain revenue payments from YouTube will now be treated as royalties from a U.S. tax perspective and that Google will withhold taxes from these payments if it is required by law.
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.
Tax withholding may begin as early as June 2021.
Is there good news?
The good news is that this withholding tax will not affect UK resident YPP creators. This applies to both UK resident individuals and companies.
For UK resident creators your YouTube royalty income will be exempt from US withholding taxes. This means you will continue to receive your royalty income from YouTube in full and this income will only taxable in the UK, as usual.
How do I claim my exemption?
Preparing and submitting the relevant W-8 BEN/E form 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 (see below):
Further information can be found on our info sheet.
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 via email@example.com or by calling us on 01273 043678.