Matthew,
My understanding was that prizes weren't taxable and that previous
attempts by the Inland Revenue to tax them had failed. I probably read
the same bit of the W&A Yearbook as you did.
I had a look at the Inland Revenue website, but didn't find anything
relevant, except that gambling and lottery prizes are exempt from tax.
My (uninformed) opinion would be that if the IR is going to tax prize
money, then all prize money from competitions that involve some skill
and judgement should be taxed, since by definition, if someone's won a
prize, they've gained money from the pursuit, and so it's part of their
business. It doesn't seem reasonable to tax someone on their prize money
just because they've paid tax on other earnings in the same field.
So I'd reckon there would be a good case for disputing the demand. If
the IR are adamant, you could at least offset the cost of entering the
competitions you won, and any that you entered but didn't win. Also the
cost of poetry books you bought in order to learn about the judges'
styles, so you could improve your chances of winning. Etc, etc.
Good luck. I for one would be interested to hear how you get on.
Best,
--
Peter
http://www.hphoward.demon.co.uk/poetry/
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