Tax

[barjon]

Having spent ages going around in circles with the tax office (why dont local tax offices deal with local people !) they confirmed to myself this morning that if Spread Betting is your sole source of income, it is indeed taxable.

Now someone has already made the point that if you speak to 5 different officers you'll get 5 different answers, but this was very clear advice, and reading between the lines the officer spoken to had clearly recently had reason to investigate said subject.

Have written to my own accountant this morning subsequently for clarification.

Well, as scose says in previous post.....

I would get that advice definitively and in writing. You might then send it to the CEO of your SB company(s) since it is contrary to all that has gone before and to their (SB) claims. Let their lawyers pursue it for you.

jon

 

[scose-no-doubt]

I've never really known the revenue to give advice out tbh. You normally get a load of tripe unless you speak to a specialist technician anyhow.

 

[barjon]

I've never really known the revenue to give advice out tbh. You normally get a load of tripe unless you speak to a specialist technician anyhow.

The best way is to complain to your MP about contradictory advice and setting out the precise question you've tried to get answered. It'll then be treated as Parliamentary Correspondence and dealt with quickly and carefully. You might still get an equivocal answer though

 

[capitalspreads]

an interesting discussion but i really think that the vitally important bit, it appears to me, in the sentence is "if Spread Betting is your sole source of income".

i would be amazed if this definition encompassed more than a tiny handful of people anyway but more crucially it is,for tax legislation, incredibly specific. i.e it must be your absolute 'sole' income. Presumably all a person would have to do is put in a few days "paid work" in a whole year to nullify it ....but maybe i am wrong and a tax professional can tell us otherwise.

 

[scose-no-doubt]

You are correct in that spread betting being your sole source of income is the crux of the matter, Misses Capitalspreads.
You'd have to be able to show that your "other work" allowed you to maintain your lifestyle i.e. that it covered ALL living expenses, otherwise HMRC would have a field day.
Alternatively, as I stated earlier, if you can prove that your trades are infrequent or rather that the duration is longer than the HMRC definition of day trading, you'd have a case for assessment under the CGT regime which would mean exemption. Dunno whether you'd be successful though. I've seem them throw out stuff that's seemed extremely clear cut but to be honest they mainly crack the whip on cases that would involve repayment/credits rather than collection. Unless we're talking seriuzz cheezz that is.

 

[scose-no-doubt]

You might still get an equivocal answer though

Does Parliament provide any other kind?

 

[Hoggums]

an interesting discussion but i really think that the vitally important bit, it appears to me, in the sentence is "if Spread Betting is your sole source of income".

i would be amazed if this definition encompassed more than a tiny handful of people anyway but more crucially it is,for tax legislation, incredibly specific. i.e it must be your absolute 'sole' income. Presumably all a person would have to do is put in a few days "paid work" in a whole year to nullify it ....but maybe i am wrong and a tax professional can tell us otherwise.

Yes I would agree with that. Presumably if you have enough money to live SBing then you have savings which are earning taxable income - otherwise you could claim benefits - which would then become your income.

Being a contractor I am well used to HMRC trying to bend and muddy the rules with regard to IR35 and nearly every one of the cases that goes to court they lose. Of course what the Revenue rely on is that the mere threat of court action and penalties makes people pay up. The same goes for professional gamblers, you have to weigh up the costs of fighting them, accountants/solicitors etc against what you'd lose if you paid tax. And for many, the most economical option is to pay the tax. That doesn't mean HMRC are correct.

The documentation on the HMRC website is quite clear, the placing of a bet does not constitute the making of a trade and there is no distinction in law between placing a bet on the outcome of a horse race or the outcome of a futures contract.

 

[scose-no-doubt]

Being a contractor I am well used to HMRC trying to bend and muddy the rules with regard to IR35 and nearly every one of the cases that goes to court they lose

B*llocks. That's only because all the MSC providers have restructured and are paying NI. Ditto for the whole trust loan/repatriation dealio.

See Gabem for example.

 

[Hoggums]

IR35 has nothing to do with various tax avoidance schemes in operation. They only rose up because of IR35, before IR35 came into being these schemes didnt exist.

 

[scose-no-doubt]

IR35 has nothing to do with various tax avoidance schemes in operation.

Maybe not for you but it does for a lot of people, particularly contractors as opposed to sub-contractors.

They only rose up because of IR35, before IR35 came into being these schemes didnt exist.

Irrelevant

 

[scose-no-doubt]

 

[capitalspreads]

unfortunately income on savings and social security benefits income would presumably be 'unearned income' and therefore not calculated as income for purposes of 'sole activity'

 

[jungerns]

What are you uploading this for ??

The subject is tax and thats exactly whats being discussed ??

 

[scose-no-doubt]

Because we detracted towards IR35, contracting and associated tax avoidance, which is completely irrelevant to the OP.

 

[jungerns]

Because we detracted towards IR35, contracting and associated tax avoidance, which is completely irrelevant to the OP.

Well if you'll read what I posted earlier hopefully that will put people back on track.

I will post accountants response when I obtain it.

 

[Ross Spur]

If SB is taxable it follows that the 90% who lose will be able to claim rebates. Her Maj's Extortioners might not be so willing for it to work that way round.

 

[scose-no-doubt]

I've said before that unless you're with a specialist firm you're accountant isn't really going to be able to offer much help that you can bank on. Your best bet for a definitive answer would be a city tax lawyer. I've worked in enough practices to know that accountant either act like blowhards or seek referrals when they're out of their depth so you're better of skipping the 50/50 chance and going straight to the source.

 

[Parky]

The best way is to complain to your MP about contradictory advice and setting out the precise question you've tried to get answered. It'll then be treated as Parliamentary Correspondence and dealt with quickly and carefully. You might still get an equivocal answer though

I have sent an e-mail to Damian Green my MP to get clear cut advice I suggest other people do the same, we need this cleared up once and for all.

 

[Parky]

an interesting discussion but i really think that the vitally important bit, it appears to me, in the sentence is "if Spread Betting is your sole source of income".

i would be amazed if this definition encompassed more than a tiny handful of people anyway but more crucially it is,for tax legislation, incredibly specific. i.e it must be your absolute 'sole' income. Presumably all a person would have to do is put in a few days "paid work" in a whole year to nullify it ....but maybe i am wrong and a tax professional can tell us otherwise.

No the important question is this "is your spread betting your main source of income" that is what HMRC are interested in and as I said they told me that anybody that expects to earn a living in the UK tax free is being mislead and is at best naive.

 

[Hoggums]

Herein lies the problem "Main source of income". It's a subjective term that HMRC will use to their advantage. If a tax payer earns 50K in his full time job but makes 300K betting what's to stop them saying that the 300K was his main income?

Please show me the law that states "All main sources of income are subject to tax". I bet there is none. Having dealt with a HMRC investigation personally, they are as guilty as anyone for making up their own rules.

The fact remains that this is a grey area of law that with regards to SB'ing has not been tested in court. What it needs is a test case to determine what the rules actually are. Until that happens no-one is right. HMRC will obviously say you have to pay tax - it's in their interest to do so.

Personally I don't believe HMRC will take a case to court unless it is for a significant amount of money - because of the dangerous precident it could set. They have already lost the Graham v Green [1925] 9TC309 case, if a spread better won theirs could result in a dip in revenue from those deciding they'll no longer pay.

There are a number of pro-poker players who don't pay tax, I am not aware of any court cases against them - it would be interesting to find out if any have been taken to court.

Obviously the answer is to get your own tax advice dependent on your own personal circumstances. You are not going to get a definitive answer here.