lavelle wrote: ↑Mon Sep 03, 2018 11:43 am
do I need to declare betting income and/or put taxes on it? I've only just started playing with Betfair and it's quite the learning curve, but I'm enjoying it so far, especially with advice from here! I normally put everything into this
tax calculator to know what tax I'll be putting down - do I need to add profit from bets to this or no?
ShaunWhite wrote: ↑Mon Sep 03, 2018 4:25 pm
It's a 2 edged sword lavelle, it's not taxable but as it's also not considered as income should you ever require credit, eg a mortage, car loan etc. Even car insurance or renting property can be affected as you are 'unemployed'. I find the best approach is to say you're of 'independant means' but not everyone will swallow that unless you can also show a significant wedge in the bank.
You're also not entitled to claim Child Tax Credits or Working Tax Credits should your income fall below the threshold. You should also make sure you continue to pay class 2(?) NI contributions otherwise you'll end up without a pension.
The big earners won't be affected much but for the majority who are 'just about managing', being off-grid as far as the tax system is concerned can have it's drawbacks. There's an arguement to be made for creating a legitimate accounting entity (ie a dummy sole-trader business) and paying yourself a modest income just below the tax threshold. Anything cash-in-hand like gardening or window cleaning works well and has some allowances against tax too without drawing too much attention to yourself. It won't get you a mortgage but it does remove some of the minor inconveniences of otherwise being 'unemployed'.
My self employed work is unrelated to betting - I'm somewhat akin to a handyman, but for IT. It's definitely interesting getting a better understanding how the tax system works for this industry as it's so different to literally every other one - my question is more like I already have self employed income outside of betting, do I need to put profit from betting on top of that income, and will it be taxable or not.
LinusP wrote: ↑Mon Sep 03, 2018 6:47 pm
If they treat gambling like wages and losses could be offset then they would actually lose money due to the spread / commission.
I've seen this come up a few times and was always confused how that would actually work in practice - could anyone simplify this for me?
BetScalper wrote: ↑Mon Sep 03, 2018 8:25 pm
I don't doubt the replies. Must have got it wrong I guess. However, slightly different but I do know a self-employed forex trader, which is gambling in another form and his tax bill is HUGE.
As far as I know there are different areas of stock trading that are and aren't taxable (can't remember which are which - perhaps someone here knows & can clarify?). I know I'll never be able to get my head around that one so I haven't tried to!
Thanks for the replies all, but I'm still a little confused- most answers have answered assuming my self employed income is betting-related which it isn't, which is where my question comes from. I would have two incomes, one from the job and the other from betting (whether it's actually profitable or not we'll come to find out!
). I know now that there aren't any taxes on betting income minus some interesting caveats, so how would I declare the income - just adding it on top of my current tax forms and not deducting tax, or not adding it to that at all?
Cheers!