Betfair Premium Charge

[gazuty]

Hmmmm.

[iambic_pentameter]

Is that "Hmmmm" in a good or bad way, Gazuty?

For some reason, I can't see the image?

[andyfuller]

Who sent you that Peter? Are they reliable?

Guess I'll ask Betfair.

Someone from Betfair sent you that?

[Bluesky]

I've just started eating into my PC allowance (can't decide whether that's a good or a bad thing!)

It has to be a good thing it means your making excellent progress even though BF are going to be now taxing you. I would imagine there must be thousands of people who have tried BF sport trading and would have loved to get the stage where they were liable for the PC. I think it starts at £5K profit if memory serves doesn't it?

If you do a search for PC charge on the forums here you will find one or two threads where methods for possible PC reduction have been discussed which might give you some options to think about.

[mjmorris335]

"You’ll only be considered for the Premium Charge if your account is in profit and only if the total charges generated since joining Betfair are less than 20%† of your gross profits."

My account is in profit at the moment, but it's laughably far away from 5k.

Mike

[3virgul14]

In the last 5 years, I have paid well over 100.000 pounds in terms of PC to betfair and a large chunk of this was when i was under %20 charges. In the last 1 year I am at %40 and believe me it destroys your profits and motivation.

To see you are taxed so highly every wednesday morning, you pay thousands for providing liquidity in the markets where you work your ass off with thousands of manually fired trades and transactions.. After all that difficulty and stress, BF literally stealing %40 of what you made, for what???

Being a monopoly is not a good thing..

Weirdest thing is I was never offered anything from anyone..Not even a single email from betfair for thanking me to pay one of their employees salary every single month!!

I came to a point recently to quit this and look into other trading opportunities..If anyone knows a good platform for trading forex, binary, stocks and precious materials, please send me a PM.

[megarain]

This lack of motivation, for manual traders especially, is starting to hurt Betfair .. at least I assume it is, as they have started some PC trials/re-started ad campaigns. We knew from the last annual report, the sportsbook grew a lot, the exchange didnt.

Liquidity from manual traders is dropping, and one by one, as we migrate to other sites, their competitors get stronger.

There is a new PC trial for basketball .. as they try and grow overseas (especially US) markets. They seem to get, that liquidity providers of live sport, need incentives.

My personal turnover, has dropped off a cliff, as I find other sites to market-make -- whether I want to get-up, in early hrs, to trade this stuff, is another question.

[Bluesky]

I came to a point recently to quit this and look into other trading opportunities..If anyone knows a good platform for trading forex, binary, stocks and precious materials, please send me a PM.

Just wanted to make a couple of points on this you might want to consider (I'm not defending BFs PC charge in anyway, I personally think its disgusting)

Pont 1. From what I have read, and from my experience in financial markets, sports trading is a lot easier than financial trading. So even though you have been very successful trading sports markets, you might not be equally successful when it comes to financial trading.

Point 2. I am not a tax expert but I think I am right in saying that sports trading profits are not taxable, (the government count it as gambling). Financial trading profits are taxable, so you might find that if you become a successful financial trader that you don't have to worry about the PC charge, but you will have to pay income tax, which is likely to be at the highest bracket. Hopefully if I am wrong about this tax situation someone in the know can explain how it works.

[iambic_pentameter]

With financial trading you have a couple of options:

1) You can use Spread Betting firms which, at the current time, are exempt from tax in the UK. Also, my understanding is that they don't limit your accounts either.

2) I 'think' that with financial trading, you'd pay capital gains tax based on your profits.

As always with matters financial, seek the advice of a professional.

[Danish Bettor]

Hi all

Being a newbie on Trading, I only recently heard about the Premium Charge which obviously is a huge let down for anyone trading seriously. There are a number of things I don't quite understand on this subject.

First of all, is the PC not deducted automatically as comission but only calculated on a weekly/periodic basis? What if I won a great sum and then decided to withdraw it all - would I then technically be owing Betfair cash (I assume they would calculate it before any withdrawal though)?

Secondly, I don't understand the comission calculations from an earlier post. As it was written, there is an "implied" commision of 3% on a losing trade - what is that? To my knowledge we don't pay commisions on losing trades and why is it different from the commision on the winning trade? I don't get how you can increase the commision paid to Betfair, since it's static at 5% (or lower for bettors with higer generated volumes, I believe), but that has obviously something to do with this calculation.

Sorry for sounding like an amateur but this PC stuff is confusing.

[iambic_pentameter]

Hi Danish

Seasons Greetings

If you are a newbie, I'd focus more on learning how the markets work than being too concerned about the premium charge.

Once you get to a point where you are profitable, then you should consider it but until then, I'd put it in the background.

Best of luck with your trading.

Iambic

[Danish Bettor]

Hi Iambic

Yeah, I won't be faced with the PC anytime soon, so for now it's just a theoretical/hypothetical issue for me and in all fairness it's not something that keep me awake at night yet

Eventually, if things go as planned, it should be something I face, so I was just wondering how it was calculated, but it's not an immediate concern, granted. Main focus is of course to develop the trading strategies, but if the PC is as high as 40% or even 60% then the idea of going full time may be dead from the start and that is pretty sad.

[Euler]

There is almost nobody paying 60%, tiny numbers on 50% but if you stray into the higher rate bracket you should never really be paying more than 40%.

People like me that were on the higher rate when it was introduced were hit the hardest but on your journey to higher rates you will accrue commission which will push back d-day further into the future.

Like it was said above, if you start earning consistently enough to hit £2-300k in earnings then start asking at that point.

[Naffman]

What's better generating more commission or hedging bets to try and 'lose' on BF but that comes with its own risks as well!

Just seems a total mess trying to focus on trading but knowing the 40-60% is looming and you know you have to do something about it...

[Euler]

There are lots of break-even strategies you can pursue to delay its onset. I didn't have the chance to prepare, I was just hit by it without warning and there was nothing I could do to mitigate it.