Not at all sure it will fail Richard... there is a test case coming up and if the Revenue wins that then every author will not only no longer be able to claim their agent`s commission as a legitimate expense which is bad enough - the Revenue has said the legislation will be backdated 6 years. This means that authors would have to pay the tax plus interest for SIX YEARS on every penny of agents' commission they had claimed against tax perfectly legitimately according to the tax laws as they then stood. This is not tax evasion or avoidance. This was claiming what the law said you could claim as an expense. So if I earn say £5,000 I actually receive £4,500 as my agent charges me 10% commission - and I pay tax on that £4,500. ( My agent, of course, pays tax in their turn on what they have earned from me..) In future, I will receive £4,500 but pay tax on £5,000. I have two options. Do just that, because I need my agent. Or sack my agentand do without one. I could manage in some areas, no problem, but I could not negotiate deals with foreign publishers - let alone find those publishers to begin with - myself, or sort out the very complicated financial dealings with foreign rights taxes.. or rather, perhaps I COULD .. but it would take me a lot of my working time when I should be, well, working.
And if we all sack our agents, then those agents will go out of business, and then Mr Brown won`t get the tax money he currently earns from them.
But a fiver says the Revenue will win this one. And it would actually pretty serious for a lot of people... if I were back-taxed for 6 years on all the agents commission I have paid during that time, plus the usual interest the Revenue would undoubtedly charge, there is only one way I could pay that money - by selling my home. I suspect quite a few authors would be in the sane position.

The test case will, I guess, have its own complexities and I don't have time nor expertise to comment on the specifics. However, the absurdity of the proposal is underscored by your example of translation rights. If your publisher sells translation rights on your behalf you can only be liable for the tax on the money he sends you which is after deduction of his overhead costs actring as an agent. The Inland Revenue would have to challenge the whole accounting structures of all businesses depending on definition of agent etc. Arguably the publisher is acting as an agent for the sale of books to retailers and therefore you'd be liable for tax on the retail price not on the royalty. It cannot fly and I'll happily take your fiver!

Done.. will you represent me in court too ?