HMRC have updated information on how it applies the EU Directive on interest and royalty payments between associated companies of different Member States in its Double Taxation Guidance Notes.
As provided for at Article 1(12) of the EU Directive, the UK requires companies resident in other Member States to establish their entitlement to exemption from UK income tax. They may do this by making a claim to HMRC Residency. The claim must be certified by the tax authority of the EU Member State in which the claimant is resident.
Relief at source is available for UK-source interest payments in cases where HMRC Residency is able to issue an exemption notice under The Exemption from Tax For Certain Interest Payments Regulations 2004 - Statutory Instrument Number 2622 of 2004.
It is not possible to ask HMRC Residency for advance authority to pay royalties without deduction of tax. Claim form EU Interest & Royalties may be used only to claim repayment of tax deducted from UK-source royalty payments.
Full details on how to claim an exemption or refund are available here