fbpx

Professional Gambler Fends Off £290,000 Income Tax Demand

5th May 2020 By

HM Revenue and Customs (HMRC) are always on the lookout for unexplained cash earnings which have not been declared for tax. However, in one case, a former professional gambler was relieved of a six-figure Income Tax bill after convincing the First-tier Tribunal (FTT) that his wealthy lifestyle was funded by his non-taxable winnings.

HMRC launched an investigation after noticing large amounts of cash being paid into the man’s 10 bank accounts. On the basis that there was no reasonable explanation for those receipts, HMRC asserted that he had, over a period of about seven years, failed to declare his income from a taxable trade. Income Tax demands totalling £290,928 were raised against him, together with late payment penalties of £132,193.

In challenging those bills before the FTT, the man argued that the entirety of his income throughout the relevant period represented gambling winnings. He said that he was a highly skilled poker player who frequently won handsomely and that he had a sophisticated system for beating the bookies when placing wagers on the outcomes of football matches.

He had not been employed or self-employed in any capacity during the period and it was only after he forsook his gambling lifestyle that he removed his cash winnings from his safe and began to pay them regularly into his bank accounts. The consistency of those payments was explained by the limited capacity of banks to accept £20 notes into automated machines.

In ruling on the case, the FTT noted that elements of the man’s account gave rise to justified suspicion. Successful gamblers tend to be the exception and few people have the sangfroid to risk such large sums of money. However, his evidence, which was backed up by several other witnesses, was consistent and had remained unshaken under cross-examination.

He had given a detailed and lucid explanation of the intricate system he used to win on football matches, which involved careful research and calculation rather than hunches or guesses. He had also demonstrated deep experience and knowledge of high-stakes poker. His account was accepted in full and the FTT found that, apart from any bank interest, he had no taxable source of income during the period. The Income Tax demands and penalties were ruled invalid and overturned.

Source: Concious

Latest News

Tenants Can Purchase Freehold When Landlord Cannot Be Found

11th June, 2024 By

The Leasehold Reform, Housing and Urban Development Act 1993 gives qualifying leaseholders the right to join together to buy the freehold of their properties – a process known as collective enfranchisement. A recent case demonstrated that this right can be exercised even when the landlord cannot be found. The leaseholders of two flats in a terraced house wished to purchase it from the landlord, but were unable to ascertain his whereabouts and therefore could not serve notice on him under Section 13 of the Act. They therefore applied for an...

Court Refuses to Set Aside Divorce Order Applied for by Mistake

6th June, 2024 By

While the courts have a range of powers to set aside orders, they will only exercise them in limited circumstances. In a somewhat surprising case that has attracted much comment, the High Court declined to set aside a final order of divorce that had been applied for by mistake. A couple separated in January 2023, after more than 21 years of marriage. In October that year, while financial remedy proceedings were still ongoing, the wife's legal representatives inadvertently applied for a final order of divorce in respect of her instead...

Waiting Time for Grants of Probate Falls

3rd June, 2024 By

Following concerns last year about delays in processing probate applications, recent figures from HM Courts and Tribunals Service show that waiting times for grants of probate are continuing to improve. The average time from submission of a probate application to probate being granted fell to 11.3 weeks in March 2024, a decrease from 13.7 weeks in February and 13.8 weeks in January. This is the lowest figure since March 2023, when the average was 10.8 weeks. The longest waiting time since then was in November, at 15.8 weeks: that month,...

Late Appeal Against Tax Penalties Rejected

31st May, 2024 By

It is incumbent on taxpayers to make sure they fully comply with their obligations to file returns and pay any tax due. The point was illustrated by a recent case in which a taxpayer whose return had not been received by HM Revenue and Customs (HMRC) failed to persuade the First-tier Tribunal (FTT) that he should be permitted to appeal against the resulting penalties. On the evening of 31 January 2014, the man had completed his 2012/13 Income Tax return on HMRC's website. Shortly afterwards he went to Cyprus, and...