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Tax rules on gambling winnings

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Replies: 99
By:
secret bookie
When: 02 May 10 13:58
As far as I can tell that's just not true - professional gamblers in the UK pay no tax. If they did, then they'd be able to claim tax relief on losses (someone said this earlier in this thread) and HMRC wouldn't want to open that can of worms. Furthermore, there are not enough successful pro gamblers to make it worth considering.
By:
mokegibboni
When: 02 May 10 13:59
As I've mentioned before, I've had long conversations with my accountant regarding this. He's a VERY experienced accountant - past retirement age, but still likes to work to keep his mind occupied. I've even known him to correct inexperienced tax officials when they've made an allowance mistake on my tax return and he's put them right on it on more than one occasion.

So he knows what he's talking about, especially as his main interest in life (apart from his accountancy work) is backing horses to win. He's actually better than me at that actually - experience I suppose. But he certainly knows the tax laws inside out. I think he's 76 years old now, but still as bright as a button!
By:
mokegibboni
When: 02 May 10 14:05
swift-tuttle --- not ridiculing anyone here - certainly wasn't my intention anyway, but for the record, comeingupthehill is NOT correct, sorry.
By:
swift-tuttle
When: 02 May 10 14:06
to repeat myself:

The only reason what you say is true us because the Revenue CHOOSE NOT to pursue tax from people whose sole income is from gambling. Current tax regulations would allow it if they chose to pursue tax from these individuals. But it would need testing in court.


I'm not talking about hearsay. I'm talking about what the Revenue could do under current regulations if they wanted to.
By:
mokegibboni
When: 02 May 10 14:13
Well of course, the IR tend to be a law amongst themselves, but wouldn't any change to the tax laws have to be confirmed in a future budget? As has been said here, they probably wouldn't wish to pursue this in the future because of all the claims on losing bets that they would need to take into account. They have enough of their work cut out as it is trying to get on top of all the administration!
By:
flyingbolt
When: 02 May 10 14:14
and I have explained why they never will,swift tuttle.
By:
crediter
When: 02 May 10 14:21
yep..could just see i.r..making a tax allowance for the RACING POST...pens;pencils; and shoes for walking to betting shops......pmsl.
By:
ged
When: 02 May 10 14:21
they don't have to give tax credits to losers, so that 'fairness' argument doesn't work. In the US, they simply tax you if you have a big win - (greaterthan $10k, I think) - if you don't fill in an IRS form on the spot, you don't get your winnings.
By:
swift-tuttle
When: 02 May 10 14:22
your point about claiming tax relief on losses would only apply to people whose sole form of income is from betting of course
By:
flyingbolt
When: 02 May 10 14:24
Again nonsense I'm afraid, ST

If they can tax it it can also be offset.

Whether or not it is your sole income is totally irrelevant.
By:
secret bookie
When: 02 May 10 14:27
Imagine - all gamblers just register as pros (with other sources of income) then offset all losses against other income sources. Can't wait!
By:
swift-tuttle
When: 02 May 10 14:29
no no fb

this argument only applies to those people whose sole income is from gambling
By:
flyingbolt
When: 02 May 10 14:31
Can't be bothered arguing about it,ST.Everything I have said is correct.
By:
secret bookie
When: 02 May 10 14:32
ST, sorry but you're wrong - sole income doesn't come into it. All income (whether from one or one hundred sources) is treated similarly in terms of tax. The tax man is happy enough to pick up corporation tax from the bookies. If not, more likely to re-introduce a betting tax than do anything else.
By:
mokegibboni
When: 02 May 10 14:39
no s-t. It matters not whether it's part of your income or ALL of your income. It's not even taxable if horse race winnings are your ONLY form of income. It's not at all relevant whether you have other forms of income or not. The taxman looks at ALL your income over the year and will not take into account your winnings.

So, if your ONLY income is from horse racing, they will NOT be interested (and therefore tax you) on those winnings.

I'm absolutely certain of that. They may change the law in the future of course (but I doubt it very much), but as the law stands at the moment, the situation is that winnings from any source or competition is not taxable UNDER ANY CIRCUMSTANCES!
By:
dustybin
When: 02 May 10 14:40
betfair get taxed and they tax us, its called private enterprise and is a very easy way of doing it
the original question has been delt with a thousand times on here, if you are in this game seriously you know the rules, if you have to ask you are unlikely to be that succesfull so dont worry about it
By:
Mydogsgotnonose
When: 02 May 10 14:41
You can also use your allowance to claim back tax on your savings...never bothered myself as it really does seem like taking the p!ss
By:
birch2
When: 02 May 10 14:41
Let me give you a scenario where it may apply.....

Your a one man bookmaker and outside of your job your a winning gambler.

Now if the tax man can connect your activity, you could be liable to income tax
By:
Grey Shot
When: 02 May 10 14:43
Its not taxible, as someone said, if it were, you could claim on losses. In USA it is different however
By:
cornubia
When: 02 May 10 15:10
"Its not taxible, as someone said, if it were, you could claim on losses. In USA it is different however"

Not the "you could claim on losses" red herring. You cannot claim on losses if you or not a business or have not paid tax in the first place. A business can claim on a very limited amount of trading losses specified in law but a business is paying tax in the first place.

If anyone still thinks you can claim back on gambling losses then please point us to the UK legislation that allows for that.

HMRC do not decide whether to tax or not - UK law does that. By law you have to declare your income to HMRC even if some is tax free such as ISA income. If you want tax free income on gambling you have to prove that the income declared was derived from gambling. If you can it will be tax free. If you do not declare it you are committing an offence in law.

An individual gambler does not pay tax as by a peculiar ruling in law he is not a trade or business.
If he organizes himself into a business, as Patrick Veitch claims, then he pays tax on the whole enterprise. This is all explained on the HMRC website so why don't people read this instead of giving their own half baked interpretations?
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