Are all my spread bet profits tax free?

[Forexmospherian]

I know its impossible to prove a negative so we come back to the question open to anyone in the world:

Has anyone (apart from that man of scrupulous integrity FoMoFo) been taxed for spreadbetting in the UK.

Hi Forexmospherian

No - not in large organisations, but have some accounting experience (at work & personal).

Anyway I've never heard about anyone paying taxes on sb wins apart from you.*

Regards

*regarding individuals, for companies is different - see HMRC site ('A financial spread bet, if entered into by a company, will also be a contract for differences')

Hi guys


I am probably not explaining myself clearly here - and this is what both of you and many others are not completely understanding

My payment to the HMRC would be classified as a penalty fine with interest - that of course can go back up to either 5 or 7 years ( not sure now)

It is not classified as a "tax on spreadbetting"

My earning from spreadbetting were "penalised " and i was fined and paid interest as well - and then I negotiated a settlement.

That's were the HMRC are clever

So the money I paid - via a cheque - as far as I was concerned I was not not willing to pay. But as advised by my accountancy team - ie accounts and KPMG - if you want to take this further - and get a test case in court - are you prepared to wait up to another 1 year - pay the charges now and then risk losing and be faced with a double or treble bill - which would include the HMRC's legal costs as well ??

As we keep saying - spreadbetting is tax free for the vast majority of all spreadbetting traders. However the traders who fall outside the norm ( as already discussed ) can be forced to pay a penalty or fine etc - and that money is not then going under any heading as being a "tax on spreadbetting winnings ".

No way do the HMRC want a proper test case - and they have done well over the last 12 years keeping this problem out of the courts - and they certainly have the power and the clout to do that.

Lets hope some multi millionaire spread better - who is not paying any tax from any other earnings has the balls and also a very big fat wallet to take them on.

If he's got any sense - he might prefer not to be hounded for the rest of his business life and maybe do what everybody else must be doing - ie leave it to someone else .

Finally - also the HMRC do not want a test case - its not in their interest - but they have had to advise all spreadbetting companies to request all the clients to get "individual tax advice" to make sure they fall in the majority - and therefore have no concerns etc


Regards


F

 

[itspossible]

 

[metrader]

Hi guys


I am probably not explaining myself clearly here - and this is what both of you and many others are not completely understanding


Regards


F

Hi Forexmosperian

Probably not, but if I were you I would ask for a second opinion - look for a different accountant.

Regards

 

[Forexmospherian]

Hi Forexmosperian

Probably not, but if I were you I would ask for a second opinion - look for a different accountant.

Regards

Lol

Are you joking

KPMG - Birmingham Offices - Tax consultants

KPMG are one of the Top 4 world wide Accountancy groups

http://www.accountingverse.com/articles/big-4-accounting-firms.html

If you know anything about accounting - you cannot get better to be honest

Sorry - you are soooooo wrong


Regards


F

 

[metrader]

Lol

Are you joking

KPMG - Birmingham Offices - Tax consultants

KPMG are one of the Top 4 world wide Accountancy groups

http://www.accountingverse.com/articles/big-4-accounting-firms.html

If you know anything about accounting - you cannot get better to be honest

Sorry - you are soooooo wrong


Regards


F

No - just trying to help.

Good to hear you're happy with them.

Regards

 

[Oscar Reed]

Lol

Are you joking

KPMG - Birmingham Offices - Tax consultants

KPMG are one of the Top 4 world wide Accountancy groups

http://www.accountingverse.com/articles/big-4-accounting-firms.html

If you know anything about accounting - you cannot get better to be honest

Sorry - you are soooooo wrong


Regards


F

Hi F

Dealt with some of the big 4 in Australia/pacific and Asia.

Got to say there not great.

There become too big and don't have the attention detail of a smaller accounting operation.

Very easy to hide things from them, much harder to do with a smaller operation.

Mind you they know how to charge.

Guess in a way they have become like a big supermarket, expensive, poor service and product.

Might be different in the UK

Have a good day
Oscar

Don't have spread betting in this part of the world.
Market Makers same **** with tax.

 

[Forexmospherian]

No - just trying to help.

Good to hear you're happy with them.

Regards

Hi F

Dealt with some of the big 4 in Australia/pacific and Asia.

Got to say there not great.

There become too big and don't have the attention detail of a smaller accounting operation.

Very easy to hide things from them, much harder to do with a smaller operation.

Mind you they know how to charge.

Guess in a way they have become like a big supermarket, expensive, poor service and product.

Might be different in the UK

Have a good day
Oscar

Don't have spread betting in this part of the world.
Market Makers same **** with tax.

Hi Metrader & Oscar

No problem M - they actually were keen for me to challenge the decision via the courts - ( nice fee job ) but the main specialised Tax adviser admitted that I would probably not win - and the fact that I already had "history" was not in my favour along with the fact my case was not just a simple straight forward one

With regards to a big 4 Accountancy firms performance - on Tax - i think I had the best advice possible - but will admit I have had experience in the UK and in Germany on audit's they carried out - and yes they may not be as thorough as smaller companies who try harder to get your business and are a lot more competitive on costing etc etc.

Trouble is they have a lot of credibility with the Banking world etc and so that's why so many larger groups use them etc - ie they tick the right boxes etc

Regards

F

 

[luckystrike23]

In a nutshell spread betting is tax free if it is not your main source of income: http://www.financial-spread-betting.com/Tax-free.html

 

[Lúidín]

I think some of us have being saying that for a while now !

One point about SB companies, and that is, they are fine for those who do not trade much, or even for swing or position trading, indices and fx, but if you ever decide to get seriously into daytrading stocks, or options, especially on the US market, then they are not very useful, in fact, they will cost you a lot of money in the spread alone, not to mention their limited software and regular "disconnects" when volatility arrives.

That said, I have tried most of them, and overall, with safety of funds as the top priority, then IG is about the best out there, and their mobile app is very good compared to the rest. They even have an API, so you can link to their servers. If they could tighten their spreads on US stocks, I would seriously consider them for certain trades, but never during volatile times, as the last thing you want is being unable to trade when you want to!

Lúidín

 

[postman]

In a nutshell spread betting is tax free if it is not your main source of income: http://www.financial-spread-betting.com/Tax-free.html

This guy obviously doesnt know what he's talking about.
"...That said, I have never heard of anyone being taxed on spread betting but then people probably don't advertise the fact..." He's obviously never heard of our resident Forex expert FoMoPho.
Unless of course FoMo is the only person in the world to be taxed on his general income AND be taxed on SpreadBetting winnings . How could such an expert with all his experience be caught out like that. Your source is clearly wrong I'm afraid. :whistling

 

[Forexmospherian]

This guy obviously doesnt know what he's talking about.
"...That said, I have never heard of anyone being taxed on spread betting but then people probably don't advertise the fact..." He's obviously never heard of our resident Forex expert FoMoPho.
Unless of course FoMo is the only person in the world to be taxed on his general income AND be taxed on SpreadBetting winnings . How could such an expert with all his experience be caught out like that. Your source is clearly wrong I'm afraid. :whistling

Hi Postman

Do you keep getting things wrong ???

Obviously you not reading what I say ??

For what about the 5th time in this thread - I was NOT taxed on my spreadbetting profits - I was penalised with a fine - backdated with interest.

What ever you want to call it ( its obvious the HMRC don't want it down as a "tax on spreadbetting " ) I paid money to them for not declaring my gains and told in blunt terms - don't think you can pay no tax at all and earn a substantial income / reward / profit ( again what ever terminology) by ONLY spreadbetting FX and keeping it all tax free - whilst having no other form of income - and paying no other form of tax. ( That had been my plan pre 2010)

Now - do you understand what I am saying ? but because before - you and maybe many more have not been following what actually happened

Also just to clarify - I was down on their "naughty list" from over 20+ yrs ago - well before I was spreadbetting FX. Maybe if I had never been investigated at all in my previous business career - I would have remained a pure spreadbetter and never had any problem - who knows ? However I am 100% sure in todays environment the HMRC would have found out by various means - and called me in - it might have taken 2 or even 5 yrs or more - and then I would have been in a lot more serious trouble - with maybe a massive fine etc etc

Regards


F

 

[itspossible]

F is god

 

[postman]

Hi Postman

Do you keep getting things wrong ???

Obviously you not reading what I say ??

For what about the 5th time in this thread - I was NOT taxed on my spreadbetting profits - I was penalised with a fine - backdated with interest.

..

Regards


F

Sorry Fo I'm confused? I AM reading what you say, but it seems to change with the wind.

I agree that on this thread you say you were not taxed on your spreadbetting profits! However when I asked this question in June last year;
"So this is an open invitation for anyone who has been taxed as a spread bettor to post here, I am sure we are all eager to hear from you."
http://www.trade2win.com/boards/spr...betting-tax-free-profits-not.html#post2353914

You immediately replied
"OK - me
I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler"."
http://www.trade2win.com/boards/spr...betting-tax-free-profits-not.html#post2353938

 

[Forexmospherian]

Sorry Fo I'm confused? I AM reading what you say, but it seems to change with the wind.

I agree that on this thread you say you were not taxed on your spreadbetting profits! However when I asked this question in June last year;
"So this is an open invitation for anyone who has been taxed as a spread bettor to post here, I am sure we are all eager to hear from you."
http://www.trade2win.com/boards/spr...betting-tax-free-profits-not.html#post2353914

You immediately replied
"OK - me
I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler"."
http://www.trade2win.com/boards/spr...betting-tax-free-profits-not.html#post2353938

Hi postman

Semantics or phraseology really on how I replied originally

It's "devil in the detail" stuff.

There is no way the HMRC are going to say we are going to "tax" you x amount of pounds based on your winnings from year A to year B - otherwise - in theory they are breaking their own rules and guidelines and opening a can of worms etc etc.

If I had taken it to court - that would have been one of my arguments etc but the fact that I was also guilty of other misdemeanors connected with other business interests - the amount and size of any fines - including back interest was really a "grey area" . It might have even been handled differently at another main HMRC office - but all the odds were on their side - ie do I want to really share all my dirty laundry in local papers - or even national papers

Did I take the HMRC's advice and not carry on going over completely to being a full time spread better with a £250K + capital account etc etc and expect to remain tax free infinitum etc - Have a guess ? ;-)

Regards


F

 

[postman]

So just to be clear you were never actually taxed on your spreadbetting winnings. Thats great news for everyone.

 

[Forexmospherian]

So just to be clear you were never actually taxed on your spreadbetting winnings. Thats great news for everyone.

No - I paid what they called a "penalty / fine " on the gains I made - I call it tax - but as said so many times - they will not call it a tax

We can continue this all week if you like

If you want to pretend you can be a full time spreadbetter making an income and that is your main earnings and paying no other tax at all - please carry on - no problem .

All I would say - you might be lucky and get away with it

Good Luck


Regards

F

 

[Forexmospherian]

Although I don't want to discuss my own personal tax affairs openly in any forum etc - I feel I must clarify my so called HMRC's "misdemeanors" and why I originally was investigated first time round

I would say they would classify as similar to being caught speeding at say 84 mph on a UK Motorway - or parking on double yellow lines for more than 10 minutes.

Fairly minor - I am sure maybe 90% of all drivers may have done similar at times - but both still classified as being illegal. Similar claiming tax relief in the 90's for covering more than 18k business miles a year in your car - or not disclosing your company was paying for 3 mobile phones for you and your family along with private petrol allowance etc etc. Something can start off very small and then escalate and then with the HMRC the actual fines and the back interest can end up costing far more than the tax part.

What ever phrase or words you want to use - its money then leaving you bank account and going to the HMRC bank account. We all would like to not have to pay "tax" or pay less etc - but I accept rules and regulations are all part of life - whether you like them or not.

Regards

F

 

[Benj1981]

The naivety on this subject is astounding.

Some key points:

• Governments are broke.
  
• Governments are hunting cash like we haven't seen for many years.
  
• Maximum permitted cash transaction amounts are rapidly decreasing.
  
• Governments and banks want a cashless society, because they're both broke and don't want any tax slipping through the net in the form of cash, as well as banks thinking electronic cash will stop bank runs - go and try to take out £3k in cash from your bank and see what happens! You'll be treated like you're robbing the place.
  
• Governments always raise taxes in economic downturns, which ends up killing the economy even more, thus leading to even less tax revenues.
  
• Governments only really care about their own job security, and where does their salary come from? That's right - our taxes.

So, considering the above; if you're making 6 figures off spreadbetting, barring you're not already a multi-millionaire from another industry who's just playing around - do you really think that HMRC are going to let you off not paying any tax!? Wait until we get the next massive downturn, then we'll really see the cash hunt go into overdrive!

GTTY

 

[postman]

The naivety on this subject is astounding.

Some key points:

• Governments are broke.
  
• Governments are hunting cash like we haven't seen for many years.
  
• Maximum permitted cash transaction amounts are rapidly decreasing.
  
• Governments and banks want a cashless society, because they're both broke and don't want any tax slipping through the net in the form of cash, as well as banks thinking electronic cash will stop bank runs - go and try to take out £3k in cash from your bank and see what happens! You'll be treated like you're robbing the place.
  
• Governments always raise taxes in economic downturns, which ends up killing the economy even more, thus leading to even less tax revenues.
  
• Governments only really care about their own job security, and where does their salary come from? That's right - our taxes.

So, considering the above; if you're making 6 figures off spreadbetting, barring you're not already a multi-millionaire from another industry who's just playing around - do you really think that HMRC are going to let you off not paying any tax!? Wait until we get the next massive downturn, then we'll really see the cash hunt go into overdrive!

GTTY

Thanks for your opinion on the subject.

 

[timsk]

The naivety on this subject is astounding.

. . . So, considering the above; if you're making 6 figures off spreadbetting, barring you're not already a multi-millionaire from another industry who's just playing around - do you really think that HMRC are going to let you off not paying any tax!? Wait until we get the next massive downturn, then we'll really see the cash hunt go into overdrive!

Hi Benji,
IMO, It's not so much the naivety on this subject that is astounding, rather that some members cling to an opinion that isn't supported by a single shred of evidence. That's what I find astounding.


Your comments about the government being broke and doing anything it can to claw in revenue from pretty much any source is quite correct. I doubt anyone will argue with you on that point. Additionally, they will do it in a way that maximizes their income; they'll squeeze every last penny that they can. Again, no argument there. The debate, in so far as there is one, is how they go about doing this. Currently, they do it very efficiently by taxing the one half of the equation who is making consistent profits - i.e. the spread betting firms themselves - as opposed to their punters who, for the most part, lose money. (Incidentally, SB punters pay for this in part via the spread which, as we all know, is usually wider than that provided by DMA brokers.) This arrangement suits everyone, as it means punters flock to the SB firms solely for the reason of making tax free returns (although not many do). The SB firms don't really have any other USP. The minute there's a reported case of someone paying tax on their SB profits then, one by one, the SB firms will go to the wall. They will fall like pins in a bowling alley. The industry will pretty much collapse and hundreds - if not thousands - of jobs will be lost. The government can kiss goodbye to the very lucrative income that it currently enjoys. Additionally, if any SB firms do survive, any profitable punters will be offsetting their losses from previous years along with any amount of 'must have' kit against tax, all of which will will increase the burden on HRMC resources, while their reward (in terms of tax revenue) will plummet. It makes no sense.

The scenario outlined above hasn't happened simply because there hasn't been one single reported case of a SB client paying tax on his or her profits! So, it's for these reasons (among others) that profits made via spread betting are currently tax free - and are likely to remain so for a long time to come. I could be wrong about all of this, and am more than happy to admit it, as soon as someone presents a shred of evidence and not, as postie repeatedly points out, personal opinion.
Tim.