Trading, Tax and Credit Ratings

[trendie]

specifically for traders who currently are generating an income solely from spread-betting:

if you do not pay income tax, and I assume no National Insurance, how does the big bad government view you?

the context for my question is:
it is your income and tax that ensures you are "visible" to the authorities, with regards to pensions (albeit miniscule) and other benefits, health, etc, an audit trail exists.
if your income is non-taxable from spread-betting, you leave no obvious trail, via Nat-Ins.

do you lose any rights if you dont pay Tax and Nat-Ins?

how do credit card companies rate you when you apply for cards?
my Year-End is approaching, and I have been trading since May via spread-betting.
I will still pay Corp-Tax this year due to my IT work, but next year may mean I havent made any money except through trading. this means no Nat-Ins, etc.

I am contemplating trading secondarily via IB, and pay some tax, just to ensure I dont lose my credit rating, and maintain an audit trail.

If asked, I would still say I am engaged in IT consultancy, since strictly speaking I am using a computer to number-crunch a trade . I still feel a little nervous about saying I am a futures trader from a credit-card perspective.

does this make sense? am I being paranoid?

 

[fibonelli]

Is Spread Betting really tax-free?

 

[timm]

Is Spread Betting really tax-free?

Yes.

 

[anley]

No it's not, nor is gambling on the horses IF the tax-man thinks that you make your living out of gambling. Rememeber, the tax-man can move the goal posts mid game if he wants.

There are countless cases where people have been forced to pay large sums in back-tax when they thought they were immune.

However, it all depends on how much you're making, if less than £1,000 a month then it's unlikely you'll have much of a problem. My advice (if you're winning) is to take at least 30% of your winnings and keep them on deposit then if he starts asking questions you'll at least have some money.

 

[Profitaker]

Spreadbetting is considered gambling by the tax man and as such the proceeds are tax free. It is the activity that is key, not how successful you are at it, and there is plenty of case law.

See this extract direct from the HMRC manuals;
Trade: exceptions & alternatives: betting and gambling: introduction

Then to get more specific click the link at the bottom of the page;
Trade: exceptions & alternatives: betting and gambling: the professional gambler

 

[Glenn]

do you lose any rights if you dont pay .... Nat-Ins?

In order to get the full State Pension at retirement you need to pay National Insurance for a minimum number of years.
You can make up any deficit by paying Class 3 National Insurance payments.
To find out how many years you have already paid, and therefore how many years you still need to pay if you want the full pension, ring the Nat Ins Contributions Office on 0845 302 1479 with your NI number and they will probably tell you over the phone. Otherwise you'll have to submit a form BR19 to get your 'valuation '.
Glenn

 

[nkruger]

Spreadbetting is considered gambling by the tax man and as such the proceeds are tax free. It is the activity that is key, not how successful you are at it, and there is plenty of case law.

See this extract direct from the HMRC manuals;
Trade: exceptions & alternatives: betting and gambling: introduction

Then to get more specific click the link at the bottom of the page;
Trade: exceptions & alternatives: betting and gambling: the professional gambler

There does seem to be many contradictions in the many Inland Revenue publications ~ is it a trade we're carrying on or merely gambling ?

I am at a stage where I am now earning over £1000 per week by spreadbetting ( using 3 SB companies ) and I would like to hear from other successful 'gamblers' that have arguements/discussions with the revenue.

Anyone out there ??