Hi Jason,Thanks for your reply. I have found this on a spread betting website. -
"I think that it is pretty clear that someone who pays tax on another income source will never have a problem if they make money via spread betting. The crux of the matter really relates to an individual who makes their sole income through spread betting."
On the other hand -
" Let’s assume that you earned £50, at the weekend, stacking shelves in Tesco but, traded 12 hours a day during the normal working week. Your profits, from trading, amounted to approximately £5,000 per week and you made 10 trades each day; what would HMRC consider to be your primary occupation and income source?
The shelf stacking in Tesco’s? Unlikely, I think…"
The article went on to say that no one has ever been convicted of tax avoiding or evasion due to spread betting.
I think it may be advisable to have another form of income as well, that you do pay tax on, just to stay under the radar, it could be passive such as rental income?
You're making it sound very complicated. Its really not. If you are ever approached by an overzealous tax offical, use this statement:
"I am gambling by way of spreadbetting. Gambling in the UK is NOT an income and therefore any WINNINGS are not taxable."
Obviously do not encourage them to investigate you because they will if you put on your tax return 'Financial Trader' or 'Professional Trader'. Also do not declare it as an income and certainly do not try and get finance off the back of it. Ie, apply for a mortgage/loan/credit card by stating your 'earnings' are ex-amount from trading. Remember, with spreadbetting, you are gambling only.
If you find yourself being harassed by HMRC regarding this matter...complain.
However, like I mentioned above. HMRC know who I am and know how much I win through my gambling affairs - not that its any of their business. Job or no job, my winnings through gambling are not taxable. That is the LAW of the UK and until it is changed in parliament, the fact remains the same. Gambling is not tax deductible.
Now, having said that and before a smart alec or 'confused' person pipes up and states:
"But it is taxable if you are carrying your gambling methods as a professional or second, third, first income blah blah blah"
This is reserved for traders who may use spreadbetting to hedge trades. It would also very likely apply to professional sellers, vendors as an example who spreadbet then sell their methods or books ect. However, that would be their affairs and not mine.
So to recap:
I have never been taxed on any of my winnings......ever. Whether that be at the Casino, cards, horses or spreadbetting. Regardless of whether or not I've been employed for 1 or more hours, self employed for 1 or more hours or unemployed. I've won substantial amounts of money over the course of God knows how many years spreadbetting. Something like 15 years or so I think.
Prior to that I was a financial market trader (private) using HSBC to deal through. This was different and therefore all dividends and profits were taxable.