My final thought on this issue is that there is nothing more expensive than bad financial advice.
Yep, you're right there.
Any individual that is paying tax on their winnings should immediately seek an accountant or have another conversation with the tax man, unless they need to pay tax to have an income of course.
Where so many go wrong is they ring up the Inland Revenue and immediately say things like, 'if i'm trading', this sounds immediately like a taxable job, trading is in the title. They also say things like, 'income', this of course is taxable again. They then go on to say things like, 'full time job', again a job with an income is taxable.
Instead, ring them up and say you are an individual and will be gambling 24 hours a day in the hope that you win consistantly, I will bet against a bookies called (what SB you're using), for which they give me a price that mirrors the underlying stock market. I do not buy the contract nor do I have any physical holding of this product/derivative or commodity. I simply place a bet on where the price will be in the next few minutes/hours/days ect and have the opportunity to cash in my bet at any time. This they will secretly laugh at and wish you good luck on your way. In the U.K winnings from gambling as an individual is currently not taxable so they are not interested due to the fact they cannot legally tax your earnings because you dont have any.
Someday when the challengers of the club, 'Spreadbetting is taxable if....' show they are spreadbetting full time and winning constantly (not profitable as profits are taxable) then maybe they could enlighten me further. The only people I know of that actually believe you have to pay tax on winnings are the people that dont actually do it, they dont spreadbet on a regular basis or/and they dont win enough to worry about if any at all.
As the saying goes, know what your talking about and practice what you speak of or simply talk directly with current experience.
I do however spreadbet on a regular basis and have done so for many years, in fact I gamble every day on the price of the futures market, most of the time I win, I win money for which I am not entitled (as per IR) to pay tax on as it is just winnings. I do this as my main hobby, I gamble every day and do nothing else, I am not employed or self employed, therefore I have an unemployed status, thats me, out of work. I am not entitled for any credit as I have a substantial amount of money and until this runs extremely low, I will not get any help with paying the bills. I cannot obtain any loans or credits ect so the house I have with my partner is part owned, my part is paid for with cash as I cannot obtain a mortgage.
Hope this clears up things a little, if not, speak with IR yourselves and be clear to make it clear with what you are doing. The above words should help anyone.
Winnings from gambling are not taxable as an indivual under current U.K tax laws. This is a typical statement you will find on spreadbet websites:
Spread betting is currently exempt from UK Capital Gains Tax and UK stamp duty, giving you the opportunity to make tax-free gains. It is, however, worth remembering that exemption from Capital Gains Tax also means that you cannot offset any losses against profits elsewhere. However, tax laws are subject to change, and are dependent upon individual circumstances.
This is governed and under the Financial Services Authority (FSA) and monitored obviously under U.K law (including tax law from the Inland Revenue IR).
I still feel there will be people that constantly argue with the rules of the world we live in, when you are winning money on a regular and constant basis and is all you do to get money then come back and state you are involuntarily paying tax. I will put you in touch with a good prosecution lawyer....my partner.
Good luck trading or gambling, whatever you call it, just dont call it trading in front of the tax man unless you are using CFD's or direct access.
