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Are the legal costs of a music composer in severing a contract deductible in calculating taxable profit?
My client is a composer but eventually she became very unhappy with her music publisher. The publisher had dealt with all of my client’s appearances at venues where her work was performed.
They also received all of her royalties and other payments from performances etc and this was paid to her after the publisher had deducted its costs. The client was unhappy with the way this was done and felt she could do everything they did more efficiently. She therefore decided to leave the publisher and to manage her own affairs in the future.
The client who is a sole trader sought legal advice about breaking the contract between herself and the publisher and she expects that these professional fees will cost in the region of £10 000.
Can readers advise on whether the legal costs will be an allowable expense and deductible from gross profits?
Query...
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