Tax on National Lottery winnings

[andygardener]

How does this work, If I back a loser in the 2.20 at Taunton tomorrow how can I offset my loss against my gains?

 

You buy stock A at £1K sell at £2K

You buy stock B at £1K sell at £500

 

Pay CGT on the £500 average profit.

 

Bet on stock A doubling on the exchanges make £1K untaxable profit

Bet on stock B doubling on the exchanges makes £1K no tax offset loss

 

No tax, but nothing left to show either.

[Stan Tamudo]

You won't pay tax on your winner in the 3.15 at Ludlow, so you've no need to offset your loss in the 2.30 at Taunton.

 

What if I have a double and my selections in the 3.15 at Ludlow and the 2.30 at Taunton both lose?

[ronthenekred]

Given that we are already taxed to death as it is, leave the winnings alone I mean the odds of winning are stacked against you.

 

In which case so are the odds stacked against you paying tax.

[quisquose]

The last bit. I'm not sure you can even begin to compare proffessional card players (it's often the same winners so it's not all luck) and qualified stock brokers to those who pick a few lines of numbers and buy a few scratch cards.

 

And yet the HMRC tries to establish what is luck and what is skill, draw the line, and tax or not accordingly. It is unnecessarily arbitrary and complex, and by attempting to do it based on different types of gambling, ultimately illogical and unfair.

 

I prefer to keep things simple, tax individuals incomes and gains equally irrespective of how they are acquired.

 

It's politics and public opinion, judging by the poll so far, that always complicates the matter ... no matter how much people claim to want taxation simplified. Pasty tax being a prime example.

[anywebsite]

And yet the HMRC tries to establish what is luck and what is skill, draw the line, and tax or not accordingly. It is unnecessarily arbitrary and complex, and by attempting to do it based on different types of gambling, ultimately illogical and unfair.

 

I prefer to keep things simple, tax individuals incomes and gains equally irrespective of how they are acquired.

 

It's politics and public opinion, judging by the poll so far, that always complicates the matter ... no matter how much people claim to want taxation simplified. Pasty tax being a prime example.

 

If you taxed every gambler it'd require every drunken punter at the bookies to keep a record of all their losses, or be unfairly taxed when they win. People who've just gone out for a bit of entertainment would get taxed unfairly on a lucky win because they didn't have an accountant. Most gamblers lose, most of the time. It's a bit pointless for every loser gambler to keep accurate records of all their losses in case they win. There are also extra taxes on the gambling companies that your stock broker wouldn't pay, to more than compensate for any possible losses. It's easier to draw a line than it is to audit every gambler that gets a win.

 

The lottery in particular is very highly taxed, especially if you count the 'good causes' as essentially tax revenue. It's easier to tax it at source, when bets are placed, tax on gambling companies profits or whatever than tax individual gamblers.

[wednesday1]

Haven't checked my numbers yet, If I do win the jackpot I promise Tone that I WILL pay tax on it!

[quisquose]

If you taxed every gambler it'd require every drunken punter at the bookies to keep a record of all their losses, or be unfairly taxed when they win. People who've just gone out for a bit of entertainment would get taxed unfairly on a lucky win because they didn't have an accountant. Most gamblers lose, most of the time. It's a bit pointless for every loser gambler to keep accurate records of all their losses in case they win. There are also taxes on the gambling companies.

 

I agree, which is why the tax used to be paid upfront or taken off the winnings. Until the lobbyists with connections to the gambling industry managed to convince Government with the BS that it cost the Exchequer more to manage than it collected.

 

I still agree though, and think that everybody should have a gambling allowance of say £10k, and tax should only be taken off any winnings above that, whether the winnings come from horses, cards, or short term share movements.

 

As I said, it's about simplicity, logic and fairness for me.

[anywebsite]

I agree, which is why the tax used to be paid upfront or taken off the winnings. Until the lobbyists with connections to the gambling industry managed to convince Government with the BS that it cost the Exchequer more to manage than it collected.

 

I still agree though, and think that everybody should have a gambling allowance of say £10k, and tax should only be taken off any winnings above that, whether the winnings come from horses, cards, or short term share movements.

 

As I said, it's about simplicity, logic and fairness for me.

 

That wouldn't really be fair either. What if the gambler had lost £20,000 before they get their £15,000 win? What if they have a few smaller wins that add up to over £10,000 & don't declare they're a gambler to the revenue? A lot of betting is done fairly anonymously in cash. It might not be so easy for them to prove their losses as it would with share dealing. Maybe they threw away their old betting slips. Most people who gamble lose money, so trying to collect tax from them is unfair. It's only the odd few that get a big lucky win, or professional gamblers, who make any profit to be taxed.

 

People who make a regular income from betting on horses or playing cards are called professional gamblers, keeping good records is a requirement of their job & they are taxed on their income like anybody else. It's just the amateurs that aren't taxed. A lot of people just gamble for fun & entertainment, most of them lose, they shouldn't need to submit yearly accounts in case they get a big win. Drawing a line might seem difficult, but it's about the numbers. There are millions of amateur gamblers & maybe a few hundred professional gamblers in the country. It's much easier to just tax the few hundred that are likely to make a profit.

 

Expense of collecting a tax has to be factored into it. Fairness for normal people & not requiring everybody to have their own accountant comes into it too. Requiring everybody that has a gamble to register for tax & submit returns would be a lot more bureaucracy than the revenue deciding who's lucky & who's a professional. Most people aren't on self assessment. Just taxing big wins without taking account of previous losses would be unfair. Would they also be able to write off their gambling losses against their other income? So somebody who spends half their wages on gambling would pay less tax?

 

Going to a casino, dog track or bookmakers isn't quite the same experience as buying shares, it's a lot easier to collect the right taxes on shares. Most amateur gambling is a lot more similar to money spent on entertainment than share dealing, they're not intending to make an income from it.

[XXTickerXX]

That wouldn't really be fair either. What if the gambler had lost £20,000 before they get their £15,000 win? What if they have a few smaller wins that add up to over £10,000 & don't declare they're a gambler to the revenue? A lot of betting is done fairly anonymously in cash. It might not be so easy for them to prove their losses as it would with share dealing. Maybe they threw away their old betting slips. Most people who gamble lose money, so trying to collect tax from them is unfair. It's only the odd few that get a big lucky win, or professional gamblers, who make any profit to be taxed.

 

People who make a regular income from betting on horses or playing cards are called professional gamblers, keeping good records is a requirement of their job & they are taxed on their income like anybody else. It's just the amateurs that aren't taxed. A lot of people just gamble for fun & entertainment, most of them lose, they shouldn't need to submit yearly accounts in case they get a big win.

 

Expense of collecting a tax has to be factored into it. Fairness for normal people & not requiring everybody to have their own accountant comes into it too.

 

Going to a casino, dog track or bookmakers isn't quite the same experience as buying shares, it's a lot easier to collect the right taxes on shares.

 

Professional gamblers are not taxed anything in the UK.

 

First off its a near impossibility to prove they are "professional" and not just an addicted gambler even if they win consistently

 

This is from a horse bettor...

 

BIM22017 - Trade: Exceptions & alternatives: Betting and gambling - the professional gambler

 

The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.

 

The case of Graham v Green [1925] 9TC309 concerned a man whose sole means of livelihood came from betting on horses at starting prices. Rowlatt J says at pages 313 and 314:

 

Now we come to betting, pure and simple… the man who bets with the bookmaker, and that is this case. These are mere bets. Each time he puts on his money, at whatever may be the starting price. I do not think he could be said to organise his effort in the same way as a bookmaker organises his.

 

I do not think the subject matter from his point of view is susceptible of it. In effect all he is doing is just what a man does who is a skilful player at cards, who plays every day. He plays to- day and he plays to-morrow and he plays the next day and he is skilful on each of the three days, more skilful on the whole than the people with whom he plays, and he wins.

 

But I do not think that you can find, in his case, any conception arising in which his individual operations can be said to be merged in the way that particular operations are merged in the conception of a trade.

 

I think all you can say of that man ... is that he is addicted to betting. It is extremely difficult to express, but it seems to me that people would say he is addicted to betting, and could not say that his vocation is betting. The subject is involved in great difficulty of language, which I think represents great difficulty of thought. There is no tax on a habit.

 

I do not think ”habitual” or even “systematic” fully describes what is essential in the phrase “trade, adventure, profession or vocation”.

 

This shows that having expertise or being systematic (“studying form”) is not enough to create a trade of being a ”professional gambler”.

 

Some ”professional gamblers” do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward. Whether their gambling winnings are proceeds of that trade would depend upon the facts.

[Fivetide]

The one thing that should be made illegal is book-makers and casinos that ban punters who win too much/too often. That's cheating all ends up.