Confused about tax on winnings?

[ShaunWhite]

It would be impossible for HMRC to manage

Not at all, with modern technology it would be easy. A law could be passed instructing Betfair and Betdaq to supply the data.

Absolutely. One reason there's been boom in cottage ebay businesses is that PayPal lies outside of the HMRC juris diction and they're not paying tax either because the HMRC can't see it. HMRC already have the power to look at your UK bank account whenever they see 'good reason'. We've got another income stream that uses PayPal, from day one I've made sure this isn't linked to a bank that falls under UK banking regs. You miss out on the protect that provides but we tend to only have quite small amounts moved through it quickly because PayPal stopped their cash withdrawal card scheme which used to be really handy.

One thing that would help would be to keep sports trading as small and under the radar as possible, so can everyone please stop promoting it and raising it's profile!!! The last thing we need is for it to become common knowledge and start raising eyebrows at the Treasury.....shhhhhhh ffs.

All this excitement about blockchain is a worry too, the last thing I want is for every penny I ever see being fully auditable.

The following is a (not very long) list of countries with no gambling tax, pity it's not so easy to emigrate to some of them now :
(another reason I voted how I did....a lifeboat is always useful)

Austria
Australia
Belgium
Bulgaria
Canada
Czech Republic
Denmark
Finland
Germany
Hungary
Italy
Luxembourg
Malta
Romania
Sweden
United Kingdom

[firlandsfarm]

Would they be able to handle all the rebate claims from those ex-PPI firms though? They'll all need new jobs come Aug 2019.

Not sure what you mean Spreadbet re handling rebate claims but there will be plenty of jobs ... 'self-certification' and 'interest only no repayment plan' mortgages are the next ones just being poured into the pot!

At the end of the day trading is still very much a niche market, with few, in relative terms, making a living out of it, financially it wouldn't be worthwhile for HMRC to push for new laws. But let's face it, it isn't HMRC that would request new laws, that's down to politicians playing populist policies. So we'd best hope the superstar traders like the blodger etc keep their heads down and don't tip over the applecart.

Exactly and the nanny public would encourage them to teach those nasty 'traders' a lesson ... fancy allowing them to take hard earned money off poor less aware working class people who just like a dabble at lunchtimes! I can hear the Labour benches saying and you could name the ringleaders.

[firlandsfarm]

We've got another income stream that uses PayPal, from day one I've made sure this isn't linked to a bank that falls under UK banking regs.

I opened a PayPal account from Seychelles, they were happy to open it but they said I couldn't withdraw from it!! When I asked how I would get money out they said I could use it to buy things or I could transfer it to an account where they would allow a transfer to a bank account, like a UK based bank!! Really? You get the feeling they were taking the piss

More than half of the (not very long) list of countries with no gambling tax would disappear if the EU got involved

[ShaunWhite]

None of us know what will happen, but nothing is impossible.

It does seem bizzare though that people want to stick their head above the parapit and crow about how much money they're making from 'professional trading', at least call it gambling ffs and have some chance they'll think it's just more of the flat cap brigade.

IF it does come in, I think we'll be cosying up to any relations that have spare tax free allowances and wouldn't mine having a BF account. Much like small businesses who pay their mother 15 grand a year to be a 'cleaner' and 5 grand 'guard dog rental' from one of the kids.

[ShaunWhite]

When I asked how I would get money out they said I could use it to buy things or I could transfer it to an account where they would allow a transfer to a bank account, like a UK based bank!! Really? You get the feeling they were taking the piss

Use a UK based prepayment card, but not one issued by a bank.

[LeTiss]

I think it would harder than many believe. Gambling and sports trading are very heavily linked, and our BF P&L will show a mixture of both. If Traders are getting taxed, that would be incredibly difficult to differentiate between what's a bet and a trade.

Many would offset their profits with various bookmakers, especially those outside HMRC jurisdictions. You could claim that you used cash to bet in a betting shop, in a casino, at a racetrack, or even claim money spent on the lottery was part of a strategy

It would be such a headache, that HMRC would be better off just letting the small percentage of sport traders free to keep their money

[BetScalper]

I think it would've very easy for HMRC to catch people.

All they have to do is ask BF for your annual P&L statement. You would be taxed on anything over the threshold unless you can show documented proof of other losses to offset any tax liability. Saying you lost £5000 at the dog track without a receipt would probably result in them looking at you even closer.

Unrelated but I remember some years back that they went after window cleaners because it was usually all cash based with no paper trail. They charged people on average earnings across the country unless you could prove otherwise.

[firlandsfarm]

You may be right Tiss but you have to remember when it comes to HMRC you are guilty until you prove you're innocent! If they ask for proof and you don't supply it they will just issue an estimated assessment and it's up to you to prove them wrong. They could pass a law that said if you are a trader (by their definition) then all bets are included regardless of intention. Claiming "you used cash to bet in a betting shop, in a casino, at a racetrack, or even claim money spent on the lottery was part of a strategy" ... where's the receipt? Why should you be any different to any other business that needs proof of expenses? It's not a headache for them to say "here is your assessment and this is how you can appeal". Tiss, they are not amateurs at dealing with wide boys! They questioned a set of accounts I submitted once and I had to send them the original of every receipt etc. to back the accounts up which meant I had to photocopy every receipt etc. before posting them! And then I have my doubts they even looked at them, I heard nothing for 3 months so I called them and they said 'yes, sure, we'll post them back straight away'. I don't think they looked at them, I think they just wanted to see I could produce them.

[firlandsfarm]

I think it would've very easy for HMRC to catch people.

All they have to do is ask BF for your annual P&L statement. You would be taxed on anything over the threshold unless you can show documented proof of other losses to offset any tax liability. Saying you lost £5000 at the dog track without a receipt would probably result in them looking at you even closer.

Unrelated but I remember some years back that they went after window cleaners because it was usually all cash based with no paper trail. They charged people on average earnings across the country unless you could prove otherwise.

Good points BetScraper especially the "look closer" point. If you see smoke look for the fire!

[BetScalper]

I think it would've very easy for HMRC to catch people.

All they have to do is ask BF for your annual P&L statement. You would be taxed on anything over the threshold unless you can show documented proof of other losses to offset any tax liability. Saying you lost £5000 at the dog track without a receipt would probably result in them looking at you even closer.

Unrelated but I remember some years back that they went after window cleaners because it was usually all cash based with no paper trail. They charged people on average earnings across the country unless you could prove otherwise.

Good points BetScraper especially the "look closer" point. If you see smoke look for the fire!

I was the subject of a HMRC let's look closer/audit going back 6 years.

It was a nightmare and I wouldn't want to go through it again.

Luckily I came out of it unscathed financially but the restrictions they placed on me along the way were down right intrusive.

[ruthlessimon]

"The point about betting of all types, is that the winnings of some people are, and must be, entirely offset by the losses of others. Yes, certainly, there are companies in the middle who organise things and they are taxed on their earnings and profits in the usual manner. But the winnings of some punters come from the losses of others.

It's also a pretty standard part of the UK taxation system that if there is going to be tax charged on the income or profits of something then there will also be an equal allowance against losses on doing that same thing.

So, if we introduced a tax on betting winnings we would also need to have a system of credits or allowances for betting losses. And here's the problem with that idea: betting is a less than zero sum game. The winnings of any person or group of people are obviously the losses of all other people betting. So tax charged would be equal to tax credits gained. But it's worse than that as the bookies are also getting their slice in the middle. Meaning that total winnings are less than total losses. So our credits and allowances for losses would be higher than any revenue gained from the winners."

Tim Worstall

[ruthlessimon]

One thing that would help would be to keep sports trading as small and under the radar as possible, so can everyone please stop promoting it and raising it's profile!!! The last thing we need is for it to become common knowledge and start raising eyebrows at the Treasury.....shhhhhhh ffs.

They already know - discussed it - & threw the idea out:

https://www.telegraph.co.uk/finance/new ... cerns.html

[ShaunWhite]

So, if we introduced a tax on betting winnings we would also need to have a system of credits or allowances for betting losses.

That's nonsense, once again, a business doesn't DOES NOT get a refund on their losses, they just get an allowance (aka a credit) against next years tax. HMRC win on the swings but never lose on the roundabouts.

[ShaunWhite]

They already know - discussed it - & threw the idea out:

5yrs ago, things can always change.

[ruthlessimon]

That's nonsense, once again, a business doesn't DOES NOT get a refund on their losses, they just get an allowance (aka a credit) against next years tax. HMRC win on the swings but never lose on the roundabouts.

So why hasn't it been introduced since the review in 2013?