However if the IR beleives you earn your living from Bookmakers they can deem your winnings as income. You are then liable for income tax.
I thought "tax-free" winnings was to good to be true
JonnyT said:Hi Jukes,
You can set up a UK Limited Company. This is likely from April to be the most Tax Efficient way due to NI.
It works as follows:
1) Pay yourself an income upto the Tax Threshold circa £4500. This is then deducted from the Companies profits.
2) Any profits are then taxed at 20 or 30% depending on assests traded.
3) Pay yourself in dividends. Of course this is classed as income, but no tax will be liable upto the higher rate threshold. Exceed this and you effectively pay 22.5% extra. Just leave the money in the Company for over two years then shut down the Company at a cost of 10%. Start again...
This is the best way then. Its just that IT contractors have been doing this for years only to be shafted by IR35! I think eventually all profits will have to be taken as salary which I understand is roughly another 12% loss. Ah well...