Self-employed accounting: How do you count gifts?

[Clown]

My project is almost a non-profit, except not registered as such, and for simplicity I am self-employed. Besides the payments I receive for my services, I also get given gifts quite often. For instance: I run an event, I charge a set fee for each person participating, and then mileage expenses on top. The organisers or participants may also give a gift. This is entirely up to them.

Until now I've always counted this as part of my income for my Tax Return, but I'm wondering if this is correct. Could I separate the gifts from the 'takings', which would then reduce my annual profits? Any advice? Thank you!

 

[ecommerce84]

What value gifts are we talking about?

A TV or mountain bike I may be inclined to declare, a £20 Pizza Express voucher or some fancy chocolates from Hotel Chocolat would be a personal gift to me for being such a great guy and therefore none of the taxman’s concern.

 

[Scalloway]

From here

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim41810

Voluntary payments designed in some way to augment the consideration payable for goods or services whether past, present or future, are taxable (see, for example, Severne v Dadswell [1954] 35TC649, and CIR v Falkirk Ice Rink Ltd [1975] 51TC42.

 

[Clown]

What value gifts are we talking about?

A TV or mountain bike I may be inclined to declare, a £20 Pizza Express voucher or some fancy chocolates from Hotel Chocolat would be a personal gift to me for being such a great guy and therefore none of the taxman’s concern.

£100 or so, thanks

 

[Clown]

Thanks for this. What does it mean in the attached document as far as ,"gifts and voluntary donations" ( the first clause)

 

[Scalloway]

The first clause says

voluntary payments or gifts, are not taxable unless they can be attached to a pre-existing source such as a vocation (Beynon v Thorpe [1928] 14TC1 at page 13)

Looking into the case mentioned it involved a college paying an annual sum to a retired headmaster. There was no provision in his contract for this payment and the college was under no obligation to pay it. HMRC accept this as a very rare situation.

At the bottom of the page I linked to it says.

Voluntary payments designed in some way to augment the consideration payable for goods or services whether past, present or future, are taxable (see, for example, Severne v Dadswell [1954] 35TC649, and CIR v Falkirk Ice Rink Ltd [1975] 51TC42.