HMRC internal manual

Business Income Manual

BIM100110 - Miscellaneous income: scope of the provisions: services

S687-S689 Income Tax (Trading and Other Income) Act 2005, S979-S981 Corporation Tax Act 2009

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. This contrasts with a simple gift as a ‘thank you’, for example, after performing a casual service where there was no agreement/arrangement/common expectation that such was for reward.

Voluntary gifts are not taxable under the miscellaneous income provisions. This can be a difficult area depending on the facts of the specific case. The treatment contrasts with treatment of voluntary receipts from a trade or profession, see BIM41801.

The distinction was set out by Lord Hanworth MR in Brocklesby v Merricks [1934] 18TC576 at page 584:

‘He was in a position to say: “A part of the profit which has been earned does, under the arrangement made between us, in fact belong to me.”’

As ever, whether a particular receipt is taxable depends upon the facts of the case. It is therefore important to establish all of the relevant facts in each case.

The following guidance discusses services in greater depth:

BIM100115 Services - contracts & arrangements
BIM100120 Services - amount of work done