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Going to the dogs….?

11th Aug 2014
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Q. I have a client with substantial gambling winnings, is this income taxable?
The short answer is no, winnings from gambling are not a taxable source of income. The main test case for this is Graham v Green (1925) (TC 309). 
However this was further supported by the recent case Hakki v Secretary of State for Work and Pensions and Another (2014). A Mother made a claim to the Child Support Agency in respect of the children against the father a ‘Professional Poker Player’. The Upper Tribunal (Administrative Appeals Chamber) considered the fathers activities to be of a self-employed nature and assessed accordingly. 
The father appealed to the high court, who on consideration of the facts allowed the appeal on the basis that the activities did not amount to a trade, profession or vocation. 
The activities included:
  • TV appearances
  • A website
  • The publication of poker results
  • Daily winnings targets
  • Choosing where, when and which table he played on.
So there we go….when your client tells you that the £100,000 unaccountable cash deposits in his bank account are winnings at the track and nothing whatsoever to do with his business you can rest easy in your bed once more once more…….and maybe ask him or her for  decent tip in the 2.30 at Newmarket.
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By andrew.hyde
11th Aug 2014 11:55

is this income taxable?

The long answer is however yes, if

your client is the subject of an enquiryyour client cannot prove that the money he can't otherwise explain came from gambling wins.

The presumption is always that long-term gambling results in losses not profits.  Otherwise the bookies would be taking the bus home from the races and you would be driving the Jag.  You need confirmation from an independent source (for example a credit account statement with a reputable bookie, online gambling site, casino, etc).  A list of races and winners is not enough because:

any eejit can get historical information on races from the internet'OK, the list of winners is correct, but you forgot to list all the losers'

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