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HMRC internal manual

Business Income Manual

Specific receipts: voluntary receipts: introduction

A voluntary receipt is one which the payer is under no legal obligation to make. In determining the correct treatment of a voluntary payment received you need to consider:

  • whether the sum is a receipt of the trade, and
  • if so, whether it is a receipt on revenue or on capital account.

This chapter covers the first bullet only. As regards the second see BIM40100 onwards (compensation) and BIM40450 onwards (grants and subsidies).

As always, it will be necessary to collect and consider all the facts and circumstances surrounding the payment. Where the payer may be seeking a deduction you should liaise with the recipient’s office to check and compare the information obtained. Where the receipt is not a trading receipt to be included in computing taxable trade profits, the possibility of liability to Capital Gains Tax should be considered; see CG12940 onwards.