How to legitimize gambling income.

[DoubleE91]

Hi guys. Bit of a tricky one here. Somewhat of a grey area but I don't think I'm purposely discussing anything dodgy.

I own a small business earning up to £20k/yr.
I've recently started matched betting. If you don't know what that is, I thoroughly recommend it <link removed> . All you need to know is, it's a failsafe way to generate a good amount of guaranteed gambling income entirely risk free.

Anyway, I see myself earning between £20k and £30k/yr with the matched betting whilst I continue to pursue it.

I'm looking for a mortgage soon. As far as I understand, no lender is going to consider gambling income as an income even if it is guaranteed. I've heard professional gamblers (who actually gamble, which I don't) have trouble getting mortgages and just have to save up. I understand a lender will not take notice of this income.

I am here to ask how I can possibly benefit from this income in a way that will increase amount lent.
Upping my annual income to £40k+ on a mortgage application will greatly reduce the years I need to wait to buy a house. Yes I can just add the income to the deposit, which I plan to do, but increasing the amount lent will reduce the wait by a good while.

The great thing about gambling income (even though I am not technically gambling as there is no risk), as we know, is that it's tax free.
I would be willing to sacrifice this and pay tax on it if I can somehow use it as a legit income.

Is it in any way legal for me to filter it into my business for 'services'? Like laundering? Is that a problem given the money is legal? I need a way to make a lender consider it a legit income which it is.
I also 'share' betting accounts with friends where I assist their name in betting for most of the profits. I haven't taken any money from their accounts yet as it's more profitable to just reinvest it. Should I start taking my cut from their bank, invoicing them for 'consultance fees' on a monthly basis or something so I have around £600/month to show for that? Do I need to make a company for that? Does the other person need to file any tax things as an 'employer'? Surely not, he wouldn't do that to employ a builder for some work etc?

I don't want to do anything dodgy here and I hope that's clear. It's a shame that a tax free income can be used but in a way isn't particularly useful in this case aside from helping the deposit!
p.s. Definitely check out the link. Literally free money for an hour of your time each day, or whatever you want to put in.

Cheers

 

[PipeTen-Carl]

I've not applied for a mortgage since pre-2008, so I'm not sure how they've tightened up, nor am I accountant or tax specialist... but I would imagine your looking to demonstrate regular incomings to cover the mortgage and regular outgoings to demonstrate affordability. If you were operating your gamlbing outside of your present current account, making regular payments to your present current account, these could be described and would seen as income from your freelance work as a statistician. You should not lie, but you can phrase things carefully as to be ambiguous. Case in point "guaranteed gambling income entirely risk free"

 

[Simon.P]

perhaps a way around it would be to run a business from the profits and use that for applications?

 

[UK Contractor Accountant]

Don't believe you can make £20K-£30K per year through matched betting as you would eventually run out betting platforms to sign up for the free bets? maybe wrong!

 

[paulears]

Gambling isn't tax free - it's usually tax paid, as in tax is paid. My uncle was a tipster in racing all his working life, and was called in once because HMRC could find no trace of him ever paying any tax. He explained he never had. They checked and told him they wouldn't bother him again. He issues invoices and got paid - as a commission on each bet placed on their behalf. We're talking mega money bets too. If you are good at it and understand how it works, you won't get problems with HMRC. You probably need an accountant who understands it all, though.

Before he died, I remember him telling me that his on-line accounts were being terminated more and more quickly once his account showed too much success. William Hill, BetFred etc all ban you once you are doing well, and it's easy to see trends with on-line betting. However - getting a mortgage will be extremely difficult unless you have sufficient collateral with the bank - usually nowadays property. Building Societies do not see professional gambling as 'work', and on-line bank accounts like Santander will not allow you to use their accounts for gambling purposes. You cannot even buy a lottery ticket from your Santander business account. I even appealed and they were adamant. Gambling is not acceptable usage of a business account.

My uncle had lots of ups and down, but betting in one shape or form was his entire career. At one minute to an off, I took a call for him - one of his clients wanted 500 on a certain horse. I said 500 was a lot, he smiled and said it was 500,000! He didn't get it placed in time, and the horse lost! I had to call the guy back and say it didn't get placed. He said thanks. At that level, it's all about trust.

 

[DoubleE91]

Regarding bets running out - The signup offers are just the beginning, there are constant offers for existing members Also read the part I wrote about 'sharing' accounts which is pretty common in the community.

So, were I to begin filtering some profit regularly into my current account.. (the betting all takes place with another current account elsewhere - I invest an original 1k into that and the idea was it would just continue to build until I withdraw a big chunk for a deposit to my current account). I could just add it to my tax statement with some kind of description that isn't wholly untrue and it would be no issue? An increase to my business income that a lender can't question.
Just don't want to get to the mortgage application in a couple of years and find I've been withdrawing and paying tax on this money unnecessarily to no advantage haha! But likewise I don't want to keep it in there, turn up, and say "Look, here's all this money I earned with only a 1k investment, and it will continue to grow" and them shrug it off because it's related to gambling.

Paulears - are you saying that were I do to what I've suggested above, I could add it to my statement as a regular income that the mortgage lender would consider, BUT still not have to pay tax on it in HMRCs eyes as its from gambling?

 

[paulears]

I don't pretend to understand it, but my uncle never paid ANY income tax in his life, his entire income coming from legal gambling. I do not believe the building society would see it as income at all - it's proceeds from gambing, and would not be viewed as earnings in their sense. You might find a lender willing to do it for additional cost, but to most people gambling is an insecure funding source.

 

[UK Contractor Accountant]

Betting income will not be taken into account by the high street mortgage lenders - seen as a bad risk!

To me you will not get this income taken into account for mortgage purposes - you may find some specialist mortgage broker that can help you but unlikely.

Go back to the self certfication era for mortgages and you would have stood a chance but not so now with the lenders tightening up following the recession.

 

[David Griffiths]

Is it in any way legal for me to filter it into my business for 'services'? Like laundering? Is that a problem given the money is legal? I need a way to make a lender consider it a legit income which it is.

That would certainly not be legal. It doesn't matter that the money is from a legal source, the crux is that you are misreperesenting your income to a potential mortgage lender knowing that they would refuse your application is made truthfully.

 

[Opinion87]

MoneySavingExpert has a large and helpful Matched Betting forum, with the heading:

WARNING! Matched Betting needs MASSIVE caution. Not for beginners!
This board’s for matched betting not gambling, that ISN’T MoneySaving. Mistakes can cost £1,000s.

Which is apt. Please don't go peddling it as completely risk free in the hope that people will sign up using your affiliate link. And £20-£30k a year? Good luck. Even using account sharing (which breaks just about every T&C in the book) you'll struggle, the sign up bonuses will dry up, the member bonuses won't quench your thirst, you'll end up moving on to Russian/Asian bookies which is always fun, and eventually you'll be gubbed by every bookie you can think of. I can't think of many UK bookies I can bet more than £0.25 with. Then you'll move on to arbitraged betting, and then probably spread betting, which is a whole different animal.

I should add I did very well out of matched, arbing and spread betting, but anyone trying to claim that any of them are risk free should be locked up.

 

[The Byre]

If you are making £30k on the side, you hardly need a mortgage!

 

[Thermodynamic Man]

Taking the initial bookies bonuses is fine. If you do it correctly then that's close to a grand which can be classed as risk free. After the bonuses have dried up you then have to look for re-loads and arbs and suchlike. These are not only time consuming but return little profit for the time spent. If you feel that you can make £20K - £30 doing this then fair play to you. I could not be arsed finding them and then having to do all the numerous play throughs before being able to withdraw
All I can ask is why you do not have a Skrill or Moneybookers account? these will benefit you twofold. Firstly you will get money back into your account far quicker when making withdrawals But more importantly for you is that your bank will know nothing about it. Then you can then go to any cashpoint, make your withdrawal and then deposit it into your bank account. It can be shown as a consultancy charge or whatever you wished to class it as. But there is no tax at all to pay on gambling...fact.
BTW, if the bookies get wind of you operating shared accounts then they , under their terms and conditions, have the right to close your account and confiscate all that you have inn the bank with them. Be warned...it has already happened to several I know

 

[john1989]

But there is no tax at all to pay on gambling...fact.

Not quite true.

 

[Thermodynamic Man]

Not quite true.

Please explain

 

[john1989]

In that some winnings are taxable and it depends on the nature of the winnings.

 

[Thermodynamic Man]

In that some winnings are taxable and it depends on the nature of the winnings.

That is rather vague. Would you care to explain what winnings are taxable and on what nature are you referring to? I am curious

 

[john1989]

For example a professional gambler is paid an appearance fee and is given a free bet. Any winning from the bet would be deemed to be an extension of the appearance fee and therefore taxable.

As I say, winnings are sometimes taxable and it depends on the nature of the winnings.

 

[Thermodynamic Man]

Lol...The OP is not talking about appearance fees and nor was I. He was talking about bets with online bookies. And these winnings are not taxable. But thanks for the heads up regarding appearance fees

 

[john1989]

It still renders your quote of all gambling winning are not taxable inaccurate.

 

[paulears]

I thought that free bets were not actually considered as gambling - because to gamble, a person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, on the understanding that he will receive something of value in the event of a certain outcome. Clearly if no stake was made, then no gambling tax would be paid - which presumably is how the bookies avoid paying tax on the free bets they offer. No stake = no tax?

 

[Thermodynamic Man]

No it doesn't. That fact still stands. I was not including appearance money or expenses. I was stating all winnings are tax free... and so they are

 

[David Griffiths]

No it doesn't. That fact still stands. I was not including appearance money or expenses. I was stating all winnings are tax free... and so they are

No they aren't. There are cases where the winnings themselves are taxable. Burdge v Pyne is one example. The HMRC manual refers to appearance money, which is taxable, and includes the statement "whether their gambling winnings are proceeds of that trade would depend on the facts"

 

[john1989]

No it doesn't. That fact still stands. I was not including appearance money or expenses. I was stating all winnings are tax free... and so they are

My point as illustrated was that WINNINGS can be taxable. You've misunderstood my posts.

David has kindly provided case law for this.

 

[Thermodynamic Man]

I have no idea who the hell Burdge and Pyne are nor under what circumstances their winnings were taxed. I am referring to the point the OP made initially. Betting with online bookies....and all those winnings are not taxable. End of. Turn me over now I am done

 

[paulears]

I think what they're getting at - and citing cases where the differences have been proven in court, is that you cannot simply make a blanket statement, because sometimes, because of perhaps small differences to the norm, winnings can be taxable. It's not long ago when bookies even asked you to gamble on the tax? You could have a straight bet, and NOT pay any tax on the stake, and then your winnings would have the tax deducted before you received it, or you could pay the tax on the stake, and not pay it on the winnings. I'm certainly no expert, but with online betting, you pay the tax out of the stake -no choice. Winnings as people have explained can be subject to tax - perhaps not often - but there certainly is a difference between saying all and saying most, or practically all.

The trouble with the net is that at some point in the future, someone may Google and find your comment, and use it as fact, and this is where internet legend comes from.

In fact, the topic title is confusing in itself. Gambling income is perfectly legitimate to the HMRC, it's simply to acceptable to banks and building societies because of the random element. Self-employed people have similar problems attempting to get mortgages if they don't have a track record. I also remember a previous client of mine who was one of the 'names' at Lloyds, with a required sum in cash available at the bank telling me that in his earlier days his stock exchange dealings were not considered good enough for a domestic mortgage. It's all about risk and perceived risk, and gambling is not a good one.

 

[UK Contractor Accountant]

Professional gambling winings are not taxable I suspect on the grounds that hmrc do not want to treat all those gambling losses as tax deductible!

 

[Leather Briefcase Company]

Have you thought that becoming a bookmaker might be a good future career?
No problem with a mortgage then.

 

[Bob]

HMRC guidance here