Professional Gambler - Submit Tax Assessments?

chrismac1

The problem, PlymouthMaid, is bankroll. When I was betting rugby I once hit 14 straight wins on what were 50-50 shots on the handicaps, and 11 straight losses. I bet on over 1,500 matches in 7 years, neither of those runs is statistically significant when you are hitting 58% wins and 42% losses as I was.

But what is potentially significant is the impact on your bankroll of the 11 straight losses. Not in my case as I was using conservative half Kelly staking, but I know of guys who were over-staking for whom the same 11 losses would have been the end.

Even the top guys in poker have volatile swings in bankroll. After all, the game is all about making the other guy draw to a flush at 5 to 1 when he's only getting 2 to 1 from the pot. But if a few big hands come up 5 to 1 in a row that's a tough hit on the bankroll.

arichmond64

PlymouthMaid wrote: »

I actually thought that if you were a professional player you did need to declare to the tax man but most would be out of the country enough to escape tax. Anyway my main point was going to be that if you are really a good poker player then you most likely will not need a mortgage to buy a house.

More than likely, he's an online cash game grinder, so almost everything is done in the UK behind a computer screen.

Poker is not taxable at all though, as it falls under gambling.

Also, the majority of people playing poker for a living aren't the balla players you see on tv, throwing 10k bricks around the table, they are people who grind 30-35 hours per week, earning £30 - £50k a year tax free.

The best thing you can do OP is get a BTL like you said, use some of your savings for the deposit, then see how you get on after that.

It's almost certain you won't get a traditional mortgage being a poker player, they'd probably laugh you out the place.

00ec25

the mortgage brokers (I'm not one of them) who post on the house buying board where BTL is a recurrent topic usually say:

- BTL mortgages are still mostly sourced through brokers not direct

- many, but not, all lenders require you to have a residential mortgage (or a mortgage free property obviously) first before you can get a BTL on top of it

- although not based on income multiples, at least some BTL will take account of / expect to include your "normal" income when assessing the size of the proposed loan and a frequently quoted minimum income is 25K

End point therefore is you'll almost certainly need to consult a whole of market broker and may find your selection of lenders somewhat limited

holly_hobby

Gambling winnings, if not conducted as a trade (ie advising others/spread betting), even if your main/only source of income, are not automatically treated by HMRC as earned income for income tax purposes (as its not a skill but game of chance really), because fundamentally because to do so would also mean that all losses would be a permitted deduction (offset), just as with any business - and the law of averages on gambling is you lose more than you win -which HMRC readily accept (and no doubt influenced their rulings in this).

HOWEVER, if you are carrying out a trade within the gambling arena i.e acting as a bookmaker, giving tips to others for financial gain, spreading bets as a main source of income, owing racehorses betting on them and winning, running a licence prems where you also gamble and win (list not exhaustive) - that is constitued by HMRC as an income clearly arising from a trade associated with gambling, and you must duly register under your correct schedule and prepare your annual submissions accordingly.

This may help ...http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm


And has also been previously tested under case law - ref:- Graham v Green (1925) and Down v Compston (1937)

There is also a confirmation letter from HMRC posted up on the web by someone who asked this question, (but I can't locate now), and whom were advised by HMRC that only if the indiviudal is deemed as conducting a trade in gambling aka bookmaker, etc (as noted above), that income from gambling should be delcared and taxed.

Whilst this is all great for the individual on a day to day basis, the rub is that they won't obtain be able to obtain any financial arrangement from the mainstream lenders (ignoring private banks and peer to peer lending), as any level of non-trade gambling income can clearly not be guaranteed, therefore mortgage lenders and others won't entertain (this is due to demonstrating responsible lending and of course to protect their own exposure).

Additionally, they won't qualify for any DWP benefits that are assessed on NIC contributions. (unless he is making a voluntary contirubution).

BTL mortgages, although affordability is assessed on a rental income stress test, the individual, unless a professional (ie portfolio) landlord, does need to be in receipt of earned income, and as gambling isn't a trade with a completely volatile income source, even if you do register and voluntarily pay tax, you're not going to get anywhere. Of course your definition within your mortgage app, of the nature of your semployed role, could be vague enough not to indicate you are a professional gambler, with the lender happy with any SA302s provided, but you've still the issue of if you have a bad run (and if a genuine BTL also have no tenants) servicing the debt.

Also, a majority of lenders will want you to have a current or recent mortgage history, or some lenders will accept you just owning and residing in an alternative resi property which may be owned outright - this is to avoid the applicant using BTL affordability requirements as a back door to a residential mortgage without the standard affordability verficiation and assessment ie accounts/payslips etc). Further to which, the majority of current BTL lenders have a min earned income requirement of 25k per application - so there's little chance of placing this on the high street - but there may well be a private investment bank or peer to peer lending that may be sourced.

As a add on, none registration for income tax, nor claiming any DWP benefits may certainly be an issue (if there are no other obvious means of household income), so its v important that you retain clear records of the legality of your sources of income ie dates, formal reciepts from winnings etc, etc, for any HMRC investigations - assuming of course that all source of your income are from licensed prems ?!

How about saving and buying outright ??

Hope this helps .... with many apologies for length of post !

Holly xx

getmore4less

holly_hobby wrote: »

- and the law of averages on gambling is you lose more than you win

That is being used in the wrong context.

The "law of averages" is a(layman) term used to say that things should even out over time.

Also links in with the gamblers fallacy

The reason that the Law of averages does not work when gambling using a intermedery ,
eg,
casino games - is they create a house advantage by fixing the odds so that over time they will win more than they lose eg roulette has zero/double zero which don't pay on some of the outside bets and reduce the payouts on the numbers you get 35-1 but there are 36 or 37 numbers

others make their margins in different ways.

With poker a different method is used by the company providing the service usually a cut of the bets or a fixed fee system.