Increasing deposit limits - Trading as income source

[firlandsfarm]

It all comes down to Graham vs Green (1925)
https://www.gov.uk/hmrc-internal-manual ... l/bim22017

The only thing I would say Shaun is that case was decided over 100 years ago and much has changed since then. I doubt Mr Graham placed as many bets in a day as some who are 'trading'. I know from my previous career that it is not unknown for HMRC (Inland Revenue as they were then) to change it's opinion on a tax principle when the factors previously judged have changed. In Ayrshire Pullman Motor Services v Inland Revenue, 1929 Lord Clyde confirmed tax avoidance as legal but since then HMRC have successfully challenged tax avoidance schemes. Inland Revenue Commissioners v. Burmah Oil Co. Ltd [1981] STC 174 is a case in point when the House of Lords decided that the 'paperwork' stages should be disregarded when assessing the end result which was seen to be contrary to Lord Clyde's ruling.

At the end of the day make hay while the sun shines and hope such activities remain low key but if a Government is looking for new ways to raise tax and betting becoming more and more popular don't be surprised if HMRC seek to challenge the current exemption for those who could be deemed as trading. With bookmaker/exchange computer systems it would be very easy for HMRC to look deeper into this. And remember betting covers a much wider field than it did 100 years ago ... spread betting of shares and forex!

[Acheron]

Nice post. I can't say it would surprise me either, although the one thing that won't change is the % of bettors and traders who make a decent whack. So not much in it for HMRC I suppose.

[ShaunWhite]

It's an old case but it set a precident. I agree that there's no guarentees about the situation staying the same, and for years I'd question the BA YT vids talked about being a "pro trader". But I still don't see betting on sports being taxed as there's so few people who make anything much long term and historically it's a cash in hand job.

Last thing I heard about tax was about clamping down on crypto gains and ebay/etsy side hustles.

[Alpha322]

the BA YT vids talked about being a "pro trader". .

Is there a Link to this ??

[ShaunWhite]

the BA YT vids talked about being a "pro trader". .

Is there a Link to this ??

There's a lot but doing a quick YT search... eg https://youtu.be/fJnHOK7cjb8?si=pMWzPnWs8O6X6rvC
I'm not singling Pete out, they all do it. I always wince and think STFU

[jamesedwards]

My simplistic take is that Betfair pass 40% of their charges to me (commission + expert fee) through to HMRC in betting tax (15%) + corporation tax (25%).

I've worked out that this indirect contribution to HMRC last year was almost exactly the same as if I was paying income tax on my winnings.

[weemac]

As I alluded to earlier, it's a fact that DWP actively look out for claimants whose bank accounts receive deposits from betting accounts, and if they are regular, or appear to be systematic in their size or consistency, or result from what appears to be more than just the odd lucky winning bet, then they can treat it as income, even though it isn't taxable.

So it's just a short hop for govt/HMRC to take such a view for everyone and make it taxable. With HMRC moving to compulsory digitalization, I reckon it's both very easy to implement and an inevitable next step.

[Alpha322]

As I alluded to earlier, it's a fact that DWP actively look out for claimants whose bank accounts receive deposits from betting accounts, and if they are regular, or appear to be systematic in their size or consistency, or result from what appears to be more than just the odd lucky winning bet, then they can treat it as income, even though it isn't taxable.

So it's just a short hop for govt/HMRC to take such a view for everyone and make it taxable. With HMRC moving to compulsory digitalization, I reckon it's both very easy to implement and an inevitable next step.

Totally Agree with you