Profit Averaging for Authors and Artists (2026/27)
How self-employed authors, composers and other creators can average fluctuating profits over two years for Income Tax, smoothing the tax hit from a single big advance or royalty year.
Why Creative Income Is So Uneven
A published author might receive a large advance in one tax year and then earn very little the next while writing the follow-up book, or a composer might land a single well-paid commission that dwarfs a typical year's income. Because Income Tax is charged year by year with progressive rate bands, that single exceptional year can be taxed much more heavily than the same total income spread evenly would be.
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Model self-employed profit and taxHow the Relief Works
Averaging relief for creative artists compares the current tax year's profit with the previous year's. Where the lower of the two is significantly below the higher, the two figures are averaged and Income Tax is recalculated for both years based on that averaged profit β reducing the amount taxed at higher rates in the peak year, in exchange for a slightly higher recalculated liability in the lower year.
Who Qualifies
The relief is aimed specifically at self-employed creators of original works β writing, composing and similar creative output β rather than every self-employed person working in a creative industry. Illustrators, ghostwriters and composers producing original work can qualify; someone doing purely administrative or production work in a creative business generally would not, since the relief is tied to being the actual creator of the work.
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Frequently asked questions
What is averaging relief for creators?
It's a Self Assessment relief allowing self-employed authors and other qualifying creative artists to average their trading profits over two consecutive tax years, reducing the higher-rate tax bite that a single very profitable year (a big advance, a hit book or a one-off commission) can otherwise cause.
Who counts as a qualifying creative artist for this relief?
It broadly covers self-employed creators of original literary, dramatic, musical or artistic works β authors, composers, playwrights and similar β where their profits from creating those works fluctuate significantly year to year. It is a narrower category than 'self-employed in a creative industry' generally.
How does the two-year averaging calculation work?
The profits of the current and previous tax year are compared; where the lower year is significantly below the higher year, the two are averaged and Income Tax recalculated on the averaged figure for both years, smoothing out the effect of one exceptional year.
Is this the same as farmers' averaging relief?
It's a closely related mechanism under the same broad averaging provisions, but farmers' averaging (which can also run over five years) and creative artists' averaging (two years) are separate reliefs with their own qualifying rules β a claim needs to be made under the correct category.
Does averaging change how royalties are taxed as income?
No β royalties and advances remain taxable trading income in the normal way. Averaging only changes which tax year's rate band that income effectively falls into, by spreading the profit figure used for the calculation across two years.
How is the claim made?
Through the Self Assessment return, within the standard claim time limit, with HMRC then recalculating the Income Tax due for the two years involved based on the averaged profit.
Related reading
Ghostwriter Self-Employed Tax Guide UK (2026/27)
How self-employed ghostwriters in the UK are taxed on book fees, NDAs and rights transfers, plus which expenses β research, software, courses β are allowable in 2026/27.
Dental Technician Self-Employed Tax Guide UK (2026/27)
How self-employed and freelance dental technicians in the UK are taxed on lab work for dentists, and which materials, equipment and GDC costs are allowable expenses in 2026/27.
Farmers' Profit Averaging Relief Explained (2026/27)
How farmers can average trading profits over two or five years to smooth out volatile harvests and prices, reducing the higher-rate Income Tax spikes that uneven profits can cause.