Self-Employed Sports Traders

[Derek27]

No need to hide behind the sofa, it's a fair question. Nobody is actually complaining about being taxed because it hasn't happened (although whether people would if it happened is another matter). The thread's really about could it happen.

If it did, as it's a complex issue there could well be complaints about how it gets implemented, would it be based on profit or turnover, will arber's losses be taken into calculations, etc.

[Kafkaesque]

And I would be surprised if Betfair agreed they are the bookmakers (Exchange bets). I would expect them to plead the facebook defence of "we are only the platform, not the supplier".

If that were the case, I would have thought Betfair would look to preempt it more. As things stand, account statements run with Exchange bets/trades lumped together with straight bets on the Sportsbook. Were BF to want to plead as you say, they would surely have seperate statements, possibly even wallets, for the two?

[spreadbetting]

Look we are getting into semantic details here … all I'm saying is that in my time as a tax consultant I have seen the Inland Revenue as it was then tax things that were thought to be tax free forever. They can tax anything they want if they have the desire to do so and quoting precedent won't get you anywhere because they have it in their power to change the law in their favour. If I was working for HMRC I think I could make a very good case now because the market has changed so much over the last 5 years … FFS we even call it trading! It is probably the only legal trading that is tax free and it's trading in an area that meets with PC disapproval so they would have no problems with the general public. For those reasons it sticks out like a sore thumb and would be an easy target to shoot down. We may get away with it for years, maybe for ever, I hope we do because most of my career was spent reducing tax bills and looking for tax free ways to do things. My accountant's initial reaction when I told him what I was doing was that he expected that it would be deemed trading for profit and I had to put him right.

I wasn't aware the OP was asking us to get the crystal balls out and look into the future. I thought he was simply asking about the current tax situation where as far as I'm aware HMRC have decided to leave that tin of worms well alone as it's not worth the effort or hassle to try and tax the odd few making a living solely off Betfair trading. I guess as a tax consultant overcomplicating things is always good for business though

At the end of the day we're all aware things can change , I doubt many of us foresaw Betfair screwing people over for 60% of their profits so it's more a case of make hay whilst the sun shines.

[firlandsfarm]

I guess as a tax consultant overcomplicating things is always good for business though

If overcomplicating includes being aware of what could happen in the future and taking a view if to ignore or consider precautionary action then I guess you are right. BTW tax consultants don't over complicate things, it's not their fault tax can be complicated to the man in the street, they just seek to mitigate tax liabilities and simplify the explanation to the client as best they can. I had many clients who after a change in taxation have said "I wish I knew they might do that".

[alexmr2]

higher rate commissions would probably have to go down then to compensate the taxes and keep pros trading otherwise the whole system would implode as smaller pros left the game since any level of tax may leave them with insufficient profit !

I also had similar thoughts about how counter-productive it could end up

Currently BF takes 60% PC from the big pros (which could easily be tens of thousands per customer), and then pays taxes on their profits and everyone gets along (reasonably) happy with the arrangement

If a tax is introduced on top of this, pros are going to be taking home what, >30% of their profit? I don't see many people sticking around putting millions in turnover through the markets just to get back the average household income. BF would also lose out either way if they lose traders altogether or just the PC income. Surely this would be detrimental to the gambling industry which is currently worth billions in tax revenue every year and manages to keep people poor and in work just like the government wants

[firlandsfarm]

If a tax is introduced on top of this, pros are going to be taking home what, >30% of their profit? I don't see many people sticking around putting millions in turnover through the markets just to get back the average household income. BF would also lose out either way if they lose traders altogether or just the PC income. Surely this would be detrimental to the gambling industry which is currently worth billions in tax revenue every year and manages to keep people poor and in work just like the government wants

You are quite right alexmr2, these are the very thoughts that HMRC may be having right now and keeping them away from us at the moment … may it continue. Tax collection is a politically motivated profitable business, they have to look at the whole effect of a change … if it creates a profit for them and politically acceptable they may pursue it if not they may not pursue it unless politically advantageous. Remember Income Tax was a temporary tax introduced to raise funds to fight the Napoleonic Wars so we can blame the cheese eating surrender monkeys again!