Our client a limited company, has won a monetary prize after entering and winning in an young entrepreneur's scheme developed by a bank. Is it taxable or not?
It involved doing a pitch of their business to a panel of judges.
The bank's scheme was developed to recognise the entrepreneurial talent emerging from universities across the UK.
Any help would be welcomed.
Replies (17)
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How?
How is a limited company a young entrepreneur emerging from a UK university, exactly?
Probably
University graduates who have started a business operating through a limited company.
Does this alter the validity of the question?
Who entered the competition / who was the prize awarded to? Mr Smith or Smith Ltd (represented by Mr Smith)?
My point
Is that it is not the limited company that is the entrepreneur. Is the prize awarded to the limited company owned by, and employing, the entrepreneur? or is it awarded to the entrepreneur?
In the first case, it is the fruits of the employer and definitely taxable.
In the second case, it may not be.
Prize
I'd imagine it would be taxable because it is related to the trade (though as the above post notes, dependent on whether it is awarded the company itself represented by "Mr Smith" or awarded directly to Mr Smith). I'd assume the related costs of the pitch would be claimed too?
Which
The OP says that the company has won the prize.
Takes us back to my first question, and is why I asked it.
Sorry
The OP says that the company has won the prize.
Takes us back to my first question, and is why I asked it.
but you have lost me, so I will sign off.
Your rather strange reaction has prompted me to re-read your original question.
Were you just being a smart 'chap' trying to pick fault with the question?
In which case you have wasted my time?
@ [***] Face
I did not waste your time. You wasted mine. The purpose of my first question was to extract the response that the OP gave in their post, for the purposes of determining the issue, as per my second post.
You were just an annoying noise in the background.
My "strange reaction" was to the OP's request was to show us where it says it, rather than offering to show us all where it does not say it.
Anyway, in a slighlt different context, BIM50710 does say it. It is not legislation though, as the OP requested. See http://www.hmrc.gov.uk/manuals/bimmanual/BIM50710.htm
Dear Portia are you
naturally obnoxious or have you needed to work at it?
Either way I will follow the thread but not make any further contribution (not that you would agree that I did, I presume?).