Spread betting tax situation

[donaldduke]

Tax is not payable on SB winnings.

You already pay tax as part of the bid ask spread you are paying to the spread bet company.

Just as if you had a self select ISA and bought stocks
that went up 5 fold. You do this every year for 5 years and make 30,000 a year tax free.

You even stop working because you dont need to anymore.

Do you think the Inland revenue could ever get away with taxing you?

They can always try it on, but they would get laughed out of court.

Same with most tax issues, the Inland revenue try to spread Fear Uncertainty and Doubt because
thats the way the raise the most tax.

But in the end its the independant commisioners and the courts that will decide, not the IR.

But the IR will never take it that far because they know they will lose.

 

[stevespray]

Amun-Ra - I agree, I'll be interested to know what he says on the issue. Be sure and ask him if his thoughts / views are hypotheticals or based on genuine experiences.

I've actually made quite a bit from spreadbetting but I also run my own business which also gives me a good income. I've never paid a penny in tax on spreadbet winnings and the IR have never asked for details of my spreadbetting activities even though my accountant has mentioned to them that I am quite active in that type of speculation. I've also paid quite a lot in Capital Gains relating to Direct Access which of course is part of self asessment.

Steve.

 

[stevespray]

Afternoon DD...

I feel that most of what you say is true. There is however the issue of 'Professional Gambler' - it exists. The IR have told me that this classification exists specifically for the purpose being discused here. This I feel can not be ignored.

Another point which I would add is this. My involvement in my business gives me membership of the FSB - Federation of Small Business. Part of the membership package gives insurance against in depth tax investigations. If required the FSB provide lawyers to challenge anything unfair which the IR may try to impose. If people do go 'full time' in trading I would suggest joining the FSB purely to get that cover. There are other benefits. The cost is about £70 - £80 per year.

Steve.

 

[Tuffty]

"Part of the membership package gives insurance against in depth tax investigations."

Beware of the small print in these schemes.

 

[stevespray]

Tuffty - Indeed, always read the small print. The FSB do however have a track record of sorting out a number of issues so considering the cost I think that its a good string to have in the bow.

Steve.

 

[Bluebelle]

The advice I was given by the IR a while ago was that gains from spread betting (I didn't ask about CFDs) were NOT taxable under any circumstances as long as they were not one's sole source of income. If they were, then the IR could argue that you were a sole trader and whilst your profits from spread betting would not be taxed as such, they could argue that you should be paying NI and that your profits as a sole trader WOULD be taxable. He had never come across them doing so and was not aware of any discussions which had taken place internally about it.

 

[chump]

"IR could argue that you were a sole trader "...that's the crux of it

 

[CityTrader]

I understand from my accountant, that the inland revenues' charter, states that all tax payers should be treated equally. ( probably in a lot more words than that... It's not one rule for him as he's making money and another for the 999 out of 1,000 mug punters who dont make money...

"every professional spread better should receive the same treatment, so there must be some ruling, case law, etc that settles the issue."...wrong !

.

 

[chump]

City,
It is not a question of treating spreadbetters in a different way that is the crux of this issue...it is that the specific circumstances attached to different spreabetters may of itself lead to a different taxable assessment ...and if you put that to your accountant I am sure he will agree.

 

[top trader]

I understand from my accountant, that the inland revenues' charter, states that all tax payers should be treated equally. ( probably in a lot more words than that... It's not one rule for him as he's making money and another for the 999 out of 1,000 mug punters who dont make money...

CITY TRADER-

It is well over 3 years since you started this thread and you were waiting from IR for the outcome. Have you heard anything YET from them?

THANKS

 

[jokerjoe]

This might be of interest, part of the HMRC manual about gambling

http://www.hmrc.gov.uk/manuals/bimmanual/BIM22015.htm

Seems to me that gambling and spread betting are not considered a trade.

 

[Hoggums]

This might be of interest, part of the HMRC manual about gambling

http://www.hmrc.gov.uk/manuals/bimmanual/BIM22015.htm

Seems to me that gambling and spread betting are not considered a trade.

Can anyone reccomend an accountant who specialises in this area? I think professional advise is the way to go here. I'm finishing a contract in a few weeks and seriously considering not going back to work and trading full time. Most of my current profits are from SBs.

 

[fibonelli]

here's the bit on spreadbetting

http://www.hmrc.gov.uk/manuals/bimmanual/BIM22020.htm

 

[nkruger]

Can anyone reccomend an accountant who specialises in this area? I think professional advise is the way to go here. I'm finishing a contract in a few weeks and seriously considering not going back to work and trading full time. Most of my current profits are from SBs.

How did you get on Hoggums, re; The Taxation Prob ?

 

[the blades]

How did you get on Hoggums, re; The Taxation Prob ?

yes, any luck?

Cheers,
UTB

 

[Hoggums]

How did you get on Hoggums, re; The Taxation Prob ?

Nope - I decided I'm staying at work for another year. I can trade and work at the same time so I'm going to build up a bigger nest egg before I take the plunge.

If you google for professional gambler accountant - it leads you to a few message boards which you can trawl through.

 

[nkruger]

If you google for professional gambler accountant - it leads you to a few message boards which you can trawl through.

Thanks mate, I'll do that. My winnings are creeping up (and I'm full time SBing now) so I've got to take the bull by the bo**ocks and do something.....

 

[nkruger]

Thinking back a couple of months, somebody who shall remain nameless from one of the larger Spreadbetting firms told me SBing was tax free. I should have captured that on video.

 

[nkruger]

Some interesting posts on this forum :

http://www.taxationweb.co.uk/forum/discuss.php?id=1201

 

[higgs]

Here is a hypothetical for anyone to help with and this applies to that "subsistence" part or your sole income area . Say I open 2 accounts one with direct access or CFD's and the other a spread betting account . Say I earn £60,000 from my direct access or CFD trading that i am able to "live on as an income" and I earn £200,000 from my spreadbetting account . Is the spreadbetting account non taxable because you earn an income in your other trading , or would the IR say that because the £200,000 is more that ,that would be classed as your main income and still tax the whole lot..