The Tax Man
The Tax Man
I've just been reading about people who play machines full time, and i know its been discussed many times before that you don't have to pay tax on gambling, but i also read that the Inland Revenue CAN tax you if they consider playing machines to be your employment/main source of income, how true is this? Obviously you could keep your money in a shoe box under the bed if you like, but obviously the smart thing to do is keep it in a bank for interest reasons, but what is there to stop the tax man hitting you with a tax bill if you've got a few quid in the bank, and you have'nt worked for x amount of years?
Cobwebs
where did you read that?Scott wrote:I've just been reading about people who play machines full time, and i know its been discussed many times before that you don't have to pay tax on gambling, but i also read that the Inland Revenue CAN tax you if they consider playing machines to be your employment/main source of income, how true is this? Obviously you could keep your money in a shoe box under the bed if you like, but obviously the smart thing to do is keep it in a bank for interest reasons, but what is there to stop the tax man hitting you with a tax bill if you've got a few quid in the bank, and you have'nt worked for x amount of years?
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Yes Scott, the tax man CAN make a demand if he believes that your earnings came from fruit machines.
They call it "Principle Earnings".
I was told about this when I was in my early twenties so I saw the taxman who noted what I had declared as my main source of income, and some time later, I got a letter directing me to inform them if my situation changes.
My situation hasn't changed, so I've not informed them as such.
My life cover from Legal & General states my occupation as a Gambler, so I have, at least some proof of income origin.
They call it "Principle Earnings".
I was told about this when I was in my early twenties so I saw the taxman who noted what I had declared as my main source of income, and some time later, I got a letter directing me to inform them if my situation changes.
My situation hasn't changed, so I've not informed them as such.
My life cover from Legal & General states my occupation as a Gambler, so I have, at least some proof of income origin.
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See this link to HMRC's internal guidance manuals which makes it clear that even if you win enough to make a living it should not constitute a taxable activity:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm
Whilst this is an old case, HMRC acknowledge that notwithstanding that the ways of gambling have changed (eg fruit machines), the principles remain the same. See:
http://www.hmrc.gov.uk/manuals/bimmanual/bim22015.htm
There are other cases decided against the taxpayer where the judge refers to the degree of organisation involved. Given the way that professional machine players go about their business (paticularly the use of lists, sat navs, the systematic exploitaion of emptiers etc) I always think that a court in the modern era could reach a different view. It would be unlikely that HMRC would take the point this far- as many people know they would need to allow tax relief for losses and tapping players up for a few quid is not going to put much of a dent in the natonal deficit compared wih say going after builders doing jobs for cash.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm
Whilst this is an old case, HMRC acknowledge that notwithstanding that the ways of gambling have changed (eg fruit machines), the principles remain the same. See:
http://www.hmrc.gov.uk/manuals/bimmanual/bim22015.htm
There are other cases decided against the taxpayer where the judge refers to the degree of organisation involved. Given the way that professional machine players go about their business (paticularly the use of lists, sat navs, the systematic exploitaion of emptiers etc) I always think that a court in the modern era could reach a different view. It would be unlikely that HMRC would take the point this far- as many people know they would need to allow tax relief for losses and tapping players up for a few quid is not going to put much of a dent in the natonal deficit compared wih say going after builders doing jobs for cash.
Tax is due year on year if your classed as a sole trader, once your tax is assessed for a complete year it doesn't matter what happens the next.
Of course if your set-up as a company then losses can be offset against previous years profits (not sure if it's still max of 3 years) or rolled forward to the next year.
But anyway in this case your not set up in any form, it's just the tax man stating your earnings are taxable, they'd do like a schedule of your living costs (Rent/Mortgage, bills e,t,c) then work out a figure they reckon you must be earning to cover said outgoings and that would be your assessed earnings, however they also use other industry figures as a guide to, like say you where a hairdressers fiddling the books they'd look at other hairdressers assessments as a guide to help them, but for gambling they'd have no back up.
Of course if your set-up as a company then losses can be offset against previous years profits (not sure if it's still max of 3 years) or rolled forward to the next year.
But anyway in this case your not set up in any form, it's just the tax man stating your earnings are taxable, they'd do like a schedule of your living costs (Rent/Mortgage, bills e,t,c) then work out a figure they reckon you must be earning to cover said outgoings and that would be your assessed earnings, however they also use other industry figures as a guide to, like say you where a hairdressers fiddling the books they'd look at other hairdressers assessments as a guide to help them, but for gambling they'd have no back up.
betchrider wrote:You go upto a bird and grab her quim and say "im gonna knock the fuck outta this" and see what happens
Well they don't in the US. On all gambling winnings above a certain threshold you pay tax and if you lose you can go to hell LOL. And if you try and dodge tax there they throw you in jail for a long time LOL.Scott wrote:If they did tax you then surely you could then say you'd had a terrible year of losing, could you get a rebate?
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I don't know how it applies to other forms of gambling but you get taxed there and then in the states if you win money in a poker tournament, but only if you're American. So if you're British you need to take some form of ID with you and you can dodge the tax when being paid.
Edit - doing some more reading on the subject it appears they don't actually pay the tax there and then but they are required to fill in a form before receiving their winnings. The casino then send a copy to the IRS so they know about the win and can expect their cut. Also it only happens if you win over a certain amount.
Edit - doing some more reading on the subject it appears they don't actually pay the tax there and then but they are required to fill in a form before receiving their winnings. The casino then send a copy to the IRS so they know about the win and can expect their cut. Also it only happens if you win over a certain amount.