How to report gift cards and comp wins on self assessment?

praisedlily

Hi, I'm new to MSE, comps, and so on. I'm a sole trader and have a business bank account attached to FreeAgent to fill out self assessment. I was wondering how to report gift cards and money equivalent of comp wins on self assessment?

Should I be keeping track of all wins and then tallying them up at the end of the year? Where would I input the amount I've won when it's not going into my bank account?

Similarly, what about winning cash? Does that go direct into my bank account? My current account isn't linked to FreeAgent, should it be?

Thanks!

stig

Why do you think your winnings are liable to tax? Contrary to popular opinion, all the money you receive  isn’t taxable - it has to fall within a taxable category - earned income, capital gains, investment income etc. Things that generally generate more losses than gains are often excluded from tax - for example gambling winnings, and capital gains on cars. So, is your business one of  winning stuff? If not, then I expect the taxman isn’t interested. If it is, I suggest you get specialist accountancy advice.

sheramber

I think the OP is referring to marketing competitions through her business.

praisedlily

I'm a sole trader, so all income I gain over £1000 is apparently meant to be tracked, from my understanding?

[Deleted User]

OK - I will bite. What are the gifts and competition winnings?  Are they related to the sole-trader business?

praisedlily

As a sole trader, I have multiple lines of income - one business, one freelance work, and selling online. The competitions are ones often found here on the MSE forums, from Click to Win websites, the free postcode lottery, survey sites, and Mistplay. Mistplay is the one I earn the most from right now, in £10 giftcards, which while it's not a lot, I'm now earning more than £1000 a year so to my understanding from HMRC, all my earnings are meant to be tracked.

There's a 2014 topic on another website about "Surveys...cash (and be taxed) or vouchers?" which isn't clear on whether it was taxable at the time or not. Then there's this in the HMRC Business Income Manual: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim100110 - "A casual receipt is taxable under the miscellaneous income sweep-up provisions where it is received for a service performed as agreed/arranged for reward"

stig

If you do something knowing you’ll be rewarded for it and how much, that’s (probably) earnings.

if you do something because there’s a chance you’ll win something if you do, that’s gambling.

the UK government doesn’t tax proceeds of gambling - not because it’s nice, but because if it did accept gambling as a trading activity, they  would have to allow gambling losses as well, and there are a lot more gambling losses than winnings!

Your sole trader  income is the income you earn carrying on your trade, not other bits and pieces of money you acquire. 

praisedlily

Thanks, stig! That makes much more sense than the HMRC guidance.

So for the most part, the chance earnings are fine to ignore, but for ones that are guaranteed earnings (Mistplay, Swagbucks), I would enter those as equivalent earnings under "other taxable income" in the Self Assessment then?

Jeremy535897

If you are talking about rewards for playing computer games as a leisure activity, they are not taxable. All you can do with them, so far as I am aware, is buy more computer games. There is no commercial activity, and no usable profit.