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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Athletes: Lottery funding: Athlete Personal Awards: Trading income

If the Athlete Personal Award (APA) is the sole income from sporting activities (this will be the case for the vast majority), the normal position is that it will not be treated as a taxable receipt (see BIM50606).

This is on the basis that the APA alone will not bring into existence a source of income. The APA is subject to means testing and is paid to develop sporting potential rather than to reward existing prowess. Consequently most top professionals will be ineligible for APAs on the grounds of means. That said, each case will turn on its own facts and it is possible that the receipt of such an award could enable the recipient to increase activities or better organise themselves and realise their potential, such that a taxable source commences. In deciding whether an individual’s sporting activity is considered to be a trade you should follow the guidance in BIM50605.

If the athlete is carrying on a trade the APA is a taxable trading receipt (see BIM50606 Example 3).

If the athlete is not carrying on a trade, see BIM50675 for the tax treatment of the APA.

Pre-trading expenses

For the purpose of any claim for expenses incurred in the seven years prior to commencement of trade (see BIM46350 onwards), pre-trading expenses laid out in the sporting activity of recipients of APAs should be reduced by amounts received under the scheme.