A singer wins over £10,000 in a national competition for young singers. She is registered for Self Assessment although until now she has had no tax liability. She had left college by the time she entered the competition. I have advised her that the prize is taxable.
Surprisingly she is not happy with this advice and the organisers of the competition have expressed their belief that as the prize "is in the nature of a bursary" intended to allow the young singer to continue their studies it is tax-exempt. They do not however attach any strings to the prize and the singer can spend it how she wishes.
Am I being unfair or is this clearly a receipt of her profession?