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Is a competition prize for staff subject to tax?

We want to set up a photo competition with a prize for our employees. Would the prize be taxable?

Didn't find your answer?

Rather than pay for stock photos which we might then see on other websites/literature, we want to encourage our staff to submit photos for a competition. I'm OK with the IP etc, and we'll make sure we have competition T&Cs that include that, but I want to check whether any prize would be taxable. I would guess it's most likely to be something like an Amazon voucher, at most £50. 

Can you help?

Replies (12)

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By Jholm
22nd Aug 2019 17:29

https://www.gov.uk/guidance/employee-incentive-awards

A gift below £50 is a trivial benefit and not considered however.

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By Jholm
22nd Aug 2019 17:28

The month is June. You have 30 employees. Every day you are doing a prize draw to win a month's worth of income - names are picked out of a hat. Once you win, you're out until next month.

Tax-free earnings, woohoo!

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By Kaylee100
22nd Aug 2019 17:57

Look at the trivial benefit rules and if it doesn't fit due to level or type (have a feeling cash and vouchers dont have any limit, so you are caught immediately), youll need a P11D or a PSA agreed with HMRC (if the company wants tonpay the tax).

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Replying to Kaylee100:
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By Jholm
23rd Aug 2019 09:01

Cash gifts are included as trivial up to £50, increasing in increments per year of service.

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Replying to Jholm:
By Duggimon
23rd Aug 2019 09:40

Citation please because I'm pretty sure cash and cash vouchers are not trivial benefits. ITEPA 2003, s. 323A if you want to check for yourself.

It's a moot point anyway, an Amazon gift voucher is neither cash nor a cash voucher and so qualifies as trivial at £50 or less.

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Replying to Duggimon:
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By Kaylee100
23rd Aug 2019 09:50

That's interesting - what is a cash voucher? I see your logic but thought gift cards were what they meant by it as I can't think of anything that is a "cash voucher".

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Replying to Kaylee100:
By Duggimon
23rd Aug 2019 17:03

You can't exchange gift vouchers for cash. A cash voucher would be stamps or postal orders or cheques or winning lottery tickets or anything else you can just go in and exchange, gift vouchers are exchanged for goods or services.

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Replying to Duggimon:
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By Kaylee100
23rd Aug 2019 17:32

Ahh yes, of course. Postal orders!!! Do they still exist?

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Replying to Kaylee100:
Hallerud at Easter
By DJKL
30th Aug 2019 09:27

The birthday present of choice from one's elderly relatives in the 1960s. Our cynical local postmaster stocked toys in his post office- you might cash it there but nine times out of ten something caught your eye and the money was spent before you even left.

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Replying to Duggimon:
By rbusfield
30th Aug 2019 07:52

An Amazon voucher would be a "voucher exchangeable for goods and services only (non-cash vouchers)", therefore I believe it would be a trivial benefit if it cost the employer £50 or less. https://www.gov.uk/expenses-and-benefits-vouchers/what-to-report-and-pay (and) https://www.gov.uk/expenses-and-benefits-trivial-benefits

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Replying to Jholm:
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By Kaylee100
23rd Aug 2019 09:46
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By [email protected]
29th Aug 2019 13:03

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45075
The link goes into a variety of circumstances where prizes are taxable or not taxable.

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