BIM50665 - Athletes: Lottery Sports Fund Athlete Personal Awards: Case I & II Schedule D

If the Sports Council award of living and sporting costs 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. This is on the basis that the award alone will not bring into existence a source of income. Sports Council awards are subject to means testing and are paid to develop sporting potential rather than to reward existing prowess. Consequently it is unlikely that they will be often paid to professionals who will be ineligible 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 on a professional basis Inspectors should follow the guidance in BIM50605 - BIM50610.

Pre-trading expenses

For the purpose of any claim to relief under ICTA88/S401 (see BIM46350 onwards), pre-trading expenses laid out in the sporting activity of recipients of living cost awards should be reduced by amounts received under the scheme. A similar approach should be taken to any expenditure said to give rise to Cases VI losses, (but see BIM50685 below).