A Taxing debate

[doubleup]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

[AlunB]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

I posted that link earlier in the thread. You know they can change their mind on this right?

As in they could reclassify professional gambling as a trade fairly easily.

[The Camel]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

I agree, I doubt it is going to happen too.

That doesn't mean it shouldn't happen.

Or that people who exploit the UK's blind spot aren't tax dodgers by moving here when they are going to win a fortune.

[AlunB]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

Why? And why is it not the case in other countries where gambling is subject to tax?

[doubleup]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

I posted that link earlier in the thread. You know they can change their mind on this right?

As in they could reclassify professional gambling as a trade fairly easily.

I'm not going to get into an argument about this as we are both laymen, but AFAIK once courts have ruled on the interpretation of legislation, it has to be changed by parliament to overcome that ruling.

Anyway the trade thing would 100% open the door to people offsetting losses against other income.  It would be very easy to demonstrate that the variance in MTTs could lead to losses for years before hitting a big one.  Professional scoop six players like Doobs and Adz would easily be able to mathematically prove that their positive expectation entitled them to be classified as entrepreneurs as they ploughed fortunes into the Tote week after week, chasing the dream

[AlunB]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

I posted that link earlier in the thread. You know they can change their mind on this right?

As in they could reclassify professional gambling as a trade fairly easily.

I'm not going to get into an argument about this as we are both laymen, but AFAIK once courts have ruled on the interpretation of legislation, it has to be changed by parliament to overcome that ruling.

Anyway the trade thing would 100% open the door to people offsetting losses against other income.  It would be very easy to demonstrate that the variance in MTTs could lead to losses for years before hitting a big one.  Professional scoop six players like Doobs and Adz would easily be able to mathematically prove that their positive expectation entitled them to be classified as entrepreneurs as they ploughed fortunes into the Tote week after week, chasing the dream

It's not an argument. At least I hope it's not. It's a debate I'm quite enjoying. And you're dead right, I am most definitely not an expert on this. I was just assuming with some political will it would be a relatively easy task to pass a small piece of legislation or simply overturn the decision. I may well be wrong.

I agree it's all theoretical and is very unlikely to happen, but what often happens with these discussions is people try and sidetrack The Camel's point with a discussion on the practicalities of such a law as opposed to looking at it and arguing the moral and ethical implications of not paying tax so I was just trying to suggest a way it would be plausible and realistic to prod the discussion in another direction. And I still think it could be. It is in many other countries after all.

In terms of offsetting losses, I think that's actually reasonable if it's done honestly and the people winning are paying tax as it all balances out. The mere fact of having to keep records for all play and prove 10 hours a week and some kind of business plan etc would stop 90% of people doing it anyway.

[redarmi]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

Why? And why is it not the case in other countries where gambling is subject to tax?

It is the case in the other countries that it is trivially easy to avoid.  It is only the really big winners that are really subject to intense scrutiny.

[AlunB]

The courts decided years ago that gambling in the sense of playing cards and betting on horses etc isn't a trade, profession or vocation and therefore doesn't fall within the relevant income tax schedule, so all the debate about hours, profitability etc is irrelevant.

The govt would need to create a new tax schedule - that would take up parliamentary time, require HMRC to amend their systems and lead to everyone who places a bet having to make a tax return.  Millions in admin to collect a very small amount of tax (that would incidentally be trivially easy to avoid).

So it isn't going to happen.

Why? And why is it not the case in other countries where gambling is subject to tax?

It is the case in the other countries that it is trivially easy to avoid.  It is only the really big winners that are really subject to intense scrutiny.

Fair enough. But it does change things slightly from an ethical standpoint. It's then tax avoidance rather than just not having to pay tax.

[scotty77]

I think there is no need to change the tax situation in the UK.  obviously I'm biased but it just seems so much work for so little gain.

Also if it did come into place, then you'd just see so many accounts being opened up in family/friends names and then you'd switch accordingly.

In terms of live cash poker, then they'd have to issue receipts for records too.  A lot of money in the gambling world comes from illegal activity and you would see a lot of the players choosing a private home game too. When you see how much money is in the black economy, it's staggering and the proof of it is on every single high street.

I'm more than happy for the govt to tax the companies and for me to pay for it with a cut in rakeback etc.  not so happy about losing the French sites tho!

With regards to the UK being the home to many European players.  Well obviously they are spending money while they are living here so again while they don't pay any direct income tax, I would imagine the total tax receipts from a poker migrant is probably higher than the average UK workers.

[AlunB]

I think there is no need to change the tax situation in the UK.  obviously I'm biased but it just seems so much work for so little gain.

Also if it did come into place, then you'd just see so many accounts being opened up in family/friends names and then you'd switch accordingly.

In terms of live cash poker, then they'd have to issue receipts for records too.  A lot of money in the gambling world comes from illegal activity and you would see a lot of the players choosing a private home game too. When you see how much money is in the black economy, it's staggering and the proof of it is on every single high street.

I'm more than happy for the govt to tax the companies and for me to pay for it with a cut in rakeback etc.  not so happy about losing the French sites tho!

With regards to the UK being the home to many European players.  Well obviously they are spending money while they are living here so again while they don't pay any direct income tax, I would imagine the total tax receipts from a poker migrant is probably higher than the average UK workers.

I think perhaps you're overestimating most people's tolerance for illegal activity, but it's an interesting point(s).

[simonnatur]

Interesting debate. You may find the Betting, Gaming & Lottery Duty Bulletin that can be downloaded from:https://www.uktradeinfo.com/Statistics/Pages/TaxAndDutyBulletins.aspx interesting in terms of trends and the how the various elements contribute to the total. The National Lottery figures are pretty jaw-dropping.
Also saw that total gambling revenues make up about 0.3% of total Government revenues, so doubt they will want to make a headache for themselves, especially as punitive regimes (at individual level) in other countries are very likely to prove to be self defeating.

[AlunB]

Interesting debate. You may find the Betting, Gaming & Lottery Duty Bulletin that can be downloaded from:https://www.uktradeinfo.com/Statistics/Pages/TaxAndDutyBulletins.aspx interesting in terms of trends and the how the various elements contribute to the total. The National Lottery figures are pretty jaw-dropping.
Also saw that total gambling revenues make up about 0.3% of total Government revenues, so doubt they will want to make a headache for themselves, especially as punitive regimes (at individual level) in other countries are very likely to prove to be self defeating.

Thanks for the link. That's really interesting.

I don't see why it has to be a huge headache for the government or why it would need to be net negative. I certainly don't see why it would be punitive to ask someone to pay a normal amount of tax on their income.

[scotty77]

I think there is no need to change the tax situation in the UK.  obviously I'm biased but it just seems so much work for so little gain.

Also if it did come into place, then you'd just see so many accounts being opened up in family/friends names and then you'd switch accordingly.

In terms of live cash poker, then they'd have to issue receipts for records too.  A lot of money in the gambling world comes from illegal activity and you would see a lot of the players choosing a private home game too. When you see how much money is in the black economy, it's staggering and the proof of it is on every single high street.

I'm more than happy for the govt to tax the companies and for me to pay for it with a cut in rakeback etc.  not so happy about losing the French sites tho!

With regards to the UK being the home to many European players.  Well obviously they are spending money while they are living here so again while they don't pay any direct income tax, I would imagine the total tax receipts from a poker migrant is probably higher than the average UK workers.

I think perhaps you're overestimating most people's tolerance for illegal activity, but it's an interesting point(s).

Gambling and the black economy just goes hand in hand.  That's why betting shops tend to be in poorer areas, that's why certain groups of people are in casinos 24/7.  It can either be forced into crappy private games where even more issues arise (mainly security, and the naive guys are most at risk), or kept in the casinos and let them pay the tax. I remember at Luton a few years ago, when some guy came and did £250k on roulette at 2pm on a Saturday afternoon from plastic bin bags.  Doubt the HMRC or Grosvenor cared where that was obtained.

And most people don't even know when they are contributing to the black economy. I have a poker acquaintance who operates a load of the hand car washes in old petrol stations/pub car parks that have popped up in the last few years.  They are only viable as a business because the Romanian guys working there are on £3.50 an hour.

[AlunB]

I just don't think, say, your typcal mid 20s online pro is going to run headlong towards private games and start hiding his winnings from the taxman. But maybe I am too naive.

[scotty77]

I just don't think, say, your typcal mid 20s online pro is going to run headlong towards private games and start hiding his winnings from the taxman. But maybe I am too naive.

Unlikely I agree, but then the online player would be at a huge disadvantage to the live player who could more easily hide their income.

Think I read that this was why the US tax system was unfair as MTT players got taxed but guys who played cash games could always hide it/ pay a token amount.

Also how many poker players, who haven't had to pay tax before, will have the foresight and discipline to put away 20-30% of their winnings for when their tax return is due.