Prize money in sport ...

Yes, if it's their trade/profession.

Pity it's not possible for a parent to run a lottery with their children as the only players.

"Doug Ramage" wrote

So if they are a full-time butcher/baker/candlestick maker, and just win the World Championship as a "sideline" - are you saying that they'll get away without paying tax?! ;-)

Of course. Why do you think there are so many "amateur" competitions, such as, erm, the Olympics?

I don't even think having a full-time (or even part-time) other job is necessary to have prize winnings recognised as non-professional. Each case would turn on the facts, and those facts would determine whether the pursuit of winnings was professional in nature.

Damned if I know how they'd reach their conclusion, though. I guess that's why the put wise (wo)men on the bench, not engineers or mathematicians.

So, is the money (IIRC 1 million dollars) that goes with a Nobel prize also taxable on the same basis? (this certainly affects the science prizes)

tim

The Nobel prizes are tax exempt in the UK, IIRC, due their being unsolicited.

"Doug Ramage" wrote

Hmmmm. Does that mean that if I do some work for someone for "free", and they later give me some money "unsolicited" - that I don't have to pay tax on it?? :-))

That's hardly a valid analogy. Before people get the Nobel Prize, they don't "work for" the dynamite fund. They just bimble along grinding at their grindstone, keeping a low profile while excelling in their field. :-) It's an entirely unexpected honour, like being knighted.

But to answer your question, yes. The quid won't be taxed unless it's a quid pro quo. Under self-assessment, you are your own assessor, and if you say it isn't pro quo, then in the first instance it isn't. But there'll be hell to pay if they find out you lied.

There have been cases where unsolicited "gifts" (especially to Chartered Accountants) were held not to be taxable - being unsolicited and not payment for past services. :)

;-)

"Doug Ramage" wrote

That's interesting. In the past, I have done work for a company where the company have given some workers bottles of bubbly, simply for doing the best quality work out of the group. I was told that anyone receiving a bottle of bubbly this way would have to declare the "gift" on their tax return & pay the appropriate tax - as though it was part of their remuneration. Do you think that this is wrong?

The bottle's of bubbly were totally unexpected/unsolicited - unless you happened to be an incredibly good quality worker ;-) and so had a much better chance of being awarded one(!) ...

No, that is correct, as it seems like Employee Incentive/Award type scheme.

It is much more difficult for employees to avoid a tax liablity in these circumstances, compared to the self-employed.

How would a self-employed person award himself a bottle of bubbly other than via drawings (which are not taxbale in any case)? Nobody can pat himself on the back and call it an expense.

I was thinking in terms of unsolicited awards for the self-employed - literary etc - rather than booze. :)

Note, if awarded to himself from stock (off-licence), he would be taxed at market value not cost. :(

"Doug Ramage" wrote

Hardly - all the workers were *self-employed* !!

"Doug Ramage" wrote

Ah, so now that you know they were all self-employed - does it make a difference to your answer?

"Ronald Raygun" wrote

The bubbly can come from one of his clients!

Good point. My brother-in-law keeps getting gifts from his private patients.

Not only is that harshly unfair, but it also seems illogical except where the off-licence is a separate legal entity (i.e. Ltd Co). If he's a self-employed shopkeeper, then surely the merchandise *is already* his. Why should he be obliged to sell it to himself, thus generating unnecessary profit?

VAT is a separate issue, of course, and since the stock will have had input VAT relief, he'd have to sell it to himself at cost+VAT.

Possibly.

Is the donor of the Bubbly claiming it as an allowable expense?

Unfortunately, 'cos the House of Lords said so in the case of Sharkey v. Wernher. :(

True.