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Where Taxpayers and Advisers Meet

Gambling/Betting Related Query vs Individual

HarryStyles
Posts: 5
Joined: Tue Oct 13, 2020 1:27 pm

Gambling/Betting Related Query vs Individual

Postby HarryStyles » Tue Oct 13, 2020 1:33 pm

Hi all,

Thanks for taking the time to read this post. Over the last 3 years a friend has been betting on sports with me and vice versa. Its began to get to the point where its quite high stakes and my profits are starting to mount up to over £60,000. My assumption was always that I was gambling with a friend and there was no income tax due to this as his losses would not be allowable for income tax purposes.

However now I have began to make more money than originally thought I have stopped altogether as I feel like I should maybe be taxed on this 'income'? I feel bad because up until the last month I haven't thought too much about whether its taxable or not and if it is I would like to pay my fair share over the years.

I know there is also a fine line between acting as a bookmaker and gambling. This has only been with one person and I've never thought of myself as a bookmaker as its usually fair bets and I know poker players etc make bets with each other and do not pay tax.

Most accountants and solicitors do not get involved with anything gambling related, so I am a bit stuck for help.

Thanks

pawncob
Posts: 4548
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Gambling/Betting Related Query vs Individual

Postby pawncob » Tue Oct 13, 2020 3:49 pm

There's a difference between gambling and acting as a bookmaker. If you're just betting with a friend, then it won't be classed as income. If you're taking bets from several people then you're a bookie.
https://www.taxback.com/blog/the-ultimate-guide-to-gambling-tax-rates-around-the-world
With a pinch of salt take what I say, but don't exceed your RDA

pawncob
Posts: 4548
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Gambling/Betting Related Query vs Individual

Postby pawncob » Tue Oct 13, 2020 3:51 pm

https://www.taxationweb.co.uk/forum/viewtopic.php?f=6&t=49473&p=182622&hilit=gambling#p182622
With a pinch of salt take what I say, but don't exceed your RDA

HarryStyles
Posts: 5
Joined: Tue Oct 13, 2020 1:27 pm

Re: Gambling/Betting Related Query vs Individual

Postby HarryStyles » Tue Oct 13, 2020 3:52 pm

Thanks for your reply. What about taking bets with just one other person though? Not more than one person?

pawncob
Posts: 4548
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Gambling/Betting Related Query vs Individual

Postby pawncob » Tue Oct 13, 2020 4:56 pm

If it's one to one, then it's just gambling between friends (regardless of amount)
With a pinch of salt take what I say, but don't exceed your RDA

HarryStyles
Posts: 5
Joined: Tue Oct 13, 2020 1:27 pm

Re: Gambling/Betting Related Query vs Individual

Postby HarryStyles » Tue Oct 13, 2020 5:12 pm

If it's one to one, then it's just gambling between friends (regardless of amount)
Thanks Pawncob. Is there any evidence of this anywhere because I'm struggling to find the exact answer? Does it have to be an exact 50/50 chance bets? Because the guy rings me asking whether I want to take his bets on golf etc? But sometimes I ask him for bets. Therefore I've never thought of myself as a bookmaker per se.

Samson22
Posts: 36
Joined: Mon Aug 17, 2020 10:54 am

Re: Gambling/Betting Related Query vs Individual

Postby Samson22 » Tue Oct 13, 2020 5:57 pm

I'm no expert. But I could have sworn I read betting/gambling is exempt But if your 'income " mainly comes from it no longer is exempt.

pawncob
Posts: 4548
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Gambling/Betting Related Query vs Individual

Postby pawncob » Tue Oct 13, 2020 7:00 pm

There is no definitive test. UK law says that if it's not covered by statute law it's not taxable. (but this is a subjective matter)
With a pinch of salt take what I say, but don't exceed your RDA

bd6759
Posts: 3303
Joined: Sat Feb 01, 2014 3:26 pm

Re: Gambling/Betting Related Query vs Individual

Postby bd6759 » Tue Oct 13, 2020 7:40 pm

The law says that tax is charged on the profits of a trade or profession.

The courts have, for over 100 years (Graham v Green 1925 is the lead case), said that gambling is neither. And rightly so, otherwise losses would be tax deductible.

HarryStyles
Posts: 5
Joined: Tue Oct 13, 2020 1:27 pm

Re: Gambling/Betting Related Query vs Individual

Postby HarryStyles » Tue Oct 13, 2020 9:19 pm

Thanks for all the replies. I guess it comes down to the fine line between bookmaking and gambling. My friend asks me for a bet and I obviously have to give him odds on the event happening as its not always a 50/50 bet. But how HMRC would see it I have no idea.


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