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| ibex:radmin_raffle [2019-03-18 13:11] – katerich | ibex:radmin_raffle [2019-03-18 13:13] (current) – katerich |
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| **Q:** Is the money taxable? | **Q:** Is the money taxable? |
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| **RADMIN:** I think so. But there are a lot of variables. In the UK lottery winnings and gambling are exempt from tax. However this raffle is not a licensed lottery, it's not clear if it counts as gambling. There is not a lot of literature about cash raffles - and I would note that this raffle is a kind of inversion, normally raffles are there to raise cash, not disburse it. There are also ambiguities particular to the RADMIN context. For example in UK tax regulations, prizes are subject to tax if they're considered income generated by your business. For literary awards and prizes, HMRC says, 'the determining factor in considering whether or not such an award etc is taxable is the quality of the award in the hands of the recipient. If it comes to the individual as an incident in the exercise of his or her profession or vocation (including a subsidiary or part-time activity the profits from which are charged to Income Tax as the profits of a profession), it should normally be treated as a professional receipt and included in the computation of the taxable profits'. (HMRC Business Income Manual BIM50710) https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim50710 | **RADMIN:** I think so. But there are a lot of variables. In the UK lottery winnings and gambling are exempt from tax. However this raffle is not a licensed lottery, it's not clear if it counts as gambling. There is not a lot of literature about cash raffles - and I would note that this raffle is a kind of inversion, normally raffles are there to raise cash, not disburse it. There are also ambiguities particular to the RADMIN context. For example in UK tax regulations, prizes are subject to tax if they're considered income generated by your business. For literary awards and prizes, HMRC says, //'the determining factor in considering whether or not such an award etc is taxable is the quality of the award in the hands of the recipient. If it comes to the individual as an incident in the exercise of his or her profession or vocation (including a subsidiary or part-time activity the profits from which are charged to Income Tax as the profits of a profession), it should normally be treated as a professional receipt and included in the computation of the taxable profits'.// (HMRC Business Income Manual BIM50710) https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim50710 |
| So if you were to be awarded such a prize as a 'hobbyist' you might not have to pay tax. Does the fact that the quality of your raffle pitch is unrelated to your chance of winning exempt if from these conditions? It's unclear. At the same time,grants for artists are arguably not taxable if they are used to buy your time, not fund expenses, see https://www.artquest.org.uk/artlaw-article/do-i-have-to-pay-tax-on-the-award-or-grant-i-have-been-given. So there are multiple grey areas. We can possibly run such questions by the Cube's accountant. The prize money does not have any connection with the Cube, but he may be able to advise. | So if you were to be awarded such a prize as a 'hobbyist' you might not have to pay tax. Does the fact that the quality of your raffle pitch is unrelated to your chance of winning exempt if from these conditions? It's unclear. At the same time,grants for artists are arguably not taxable if they are used to buy your time, not fund expenses, see https://www.artquest.org.uk/artlaw-article/do-i-have-to-pay-tax-on-the-award-or-grant-i-have-been-given. So there are multiple grey areas. We can possibly run such questions by the Cube's accountant. The prize money does not have any connection with the Cube, but he may be able to advise. |
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katerich