tax

[glyder]

Does anyone have a reccommendation for an accountant that does have knowledge in this area and would be able to advise on tax planning.

I'm also interested to know if there are implications if you do earn a decent (unrelated) income on which you pay tax, but your SB profits exceed this income whether HMRC would come knocking, whether there's a solid basis or not.

Not a recommendation, cos I never used them, but they look like they should know their stuff.....
http://www.trioacc.co.uk/taxconsult/taxtraders.html

 

[Jock Strap]

If he was profitable over a number of years and had no other source of significant income, he would be classified as a professional trader. Therefore he would be taxed accordingly. Also retrospectively.
He would lose the tax free provision of the spread betting laws.

Not necessarily true...note the bit in bold in the second quote (all from HMRC guidance):

The basic position is that betting and gambling, as such, do not constitute trading...

...Although over time new forms of games of chance have evolved, these principles remain the same. The taxpayer placing a spread bet is not normally carrying on a trade. They are not taxable on the profits, nor do they receive relief for their losses. The bookmaker organising the spread bet is taxable on their profits...

The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade. This shows that having expertise or being systematic (‘studying form’) is not enough to create a trade of being a ‘professional gambler’.

Some ‘professional gamblers’ do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward. Whether their gambling winnings are proceeds of that trade would depend upon the facts.

Full Link here

 

[Jock Strap]

If you ask me, and judging by the Trio Tax website, this scaremongering about Spread betting and tax probably emanates from the accountancy firms themselves trying to make more money by "helping" those trying to make a living from the activity.

If HMRC taxed successful spread betters, then they would leave themselves open to challenge from the losers wanting to offset their losses, and as we all know there are a lot more of them than the winners. Furthermore as these successful SBers would have to set aside for tax, then they would probably have to bet less and thus HMRC would lose tax revenue from the profits of the SB firms. All in all, you'd have to be making some serious money for the HMRC to feel it worth their while risking all that.

 

[glyder]

Maybe if you are to become such a successful spreadbetter the inland revenue no longer see it as gambling as it has become a business rather than a bet? Each trade having a business risk rather than a gambling risk.
Just a thought.
I've no idea on it and would avoid spreadbet firms myself.

 

[reksa]

I totally agree with that, it just does not make sense that they could change your status.
So if your profits are protected from TAX by using ISA’s and Spread betting, we are technically unemployed as far as HMRC see it.