The changes in the current Finance Bill will bring rather more intellectual property royalties into the scope of withholding tax. The broadening of the rules means that it is important to ensure that any contracts which set out payment of royalties to a non-UK resident clearly allow the payer to withhold tax; some agreements require payments to be ‘grossed up’ in the event that withholding tax applies, at the expense of the payer. The ability to make treaty claims to reduce the UK withholding taxes will also become more important; again, contracts for payment of royalties should require the recipient to make a treaty claim to reduce withholding, where possible.