An existing client sole trader has told us he also competes in Kickboxing competitions.
He says he has won 6 fights earning a total of £1,200.
I don't think this is a trade.
However, I do think it is taxable income - although we could reduce profit by deduction of expenses.
Any thoughts please?
Replies (6)
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Hi, I specialize in sports professionals...
This income is taxable and is a trade (prize fighter)
The expenses in earning this income can be offset against it.
If you need any help, PM me
Steve
As Steve says, the income is taxable.
Expenses to watch out for are licence fees, gradings, belts, protective equipment, competition entrance fees, insurance.
He's not an amateur
Does he consider himself a PROFESSIONAL fighter?
(There's a clue there.)
training
Out of interest, would training costs be allowable too ? and travelling to the gym ?
Losing
If this is not his full time profession, what happens when he loses? Will he have a loss position to offset each year if he does not ever win again?
Try for hobby status, no profit/no loss and see if HMRC bite.