To make money out of spread betting while on benefits

[Calamariss]

So far in two months I've made 600 from spread betting on cfd. Legally am I right in thinking that it is not counted as income for benefits?

I don't want to mention it to them as they might turn it into a big deal and give me lots of paperwork to do.

Am I OK to just stay quiet?

[Owllady]

It depends what your income is from it really, doesn't it?
Yes it's a risk so you could make or lose money, but it depends what kind of money you are talking about.
I'm not on benefits so can't really advise you on the legalities, but presumably there is a threshold and after that you have to declare otherwise it's fraud. But maybe someone with some actual knowledge might come along soon. Then again, its in AIBU

[ArgyMargy]

What's cfd? Presumably over the year you will lose money too so maybe wait and see whether you end up in profit. If so you could then declare it for tax/benefit purposes. Actually that sounds too reasonable. Also if you have spare money for gambling you shouldn't be receiving benefits. YABU.

[Owllady]

It's shares and equity and all that stuff isn't it?

[Shinyshoes2]

Tbh I wouldn't bother declaring it
But that's just me

[thenewaveragebear1983]

Well if you won a tenner on the lottery would you declare it? Probably not. What about ten grand? Probably yes. So wait til the end of the year and decide if you think you should. No offence, but I bet you don't.

[Seeyounearertime]

You have to declare it i believe and you also have to tell the tax man.

As far as i am aware, Spread betting is only Tax free if it not your main source of income, if you're on benefits then spread betting is naturally your main source of income and the tax man will want a slice.

Be very wary OP. If the tax man finds out and you haven't declared it to the benefits office and the tax man you will get sanctioned and billed and may end up in a very ropey position.
(i certainly wouldnt be posting in public forums about it)

[BetsyM00]

If you were doing matched betting then profits are not counted as income for benefits or tax.

Spread-betting is a type of contracts for difference (CFD).

According to this, spread-betting (unlike other forms of betting) is recognised as an investment under the Financial Services and Markets Act 2000.

So I would imagine, just like any other investments, it has to be declared for benefit purposes.

And Argy people are still eligible for benefits when they hold under the savings threshold allowed. And are also allowed to spend their money any darned way they choose!

[Calamariss]

I am talking about small amounts, I never deposit more than 200 and withdraw often.

I often cash out when 100 ahead.

I'm on jsa , so wouldn't that count as my main source of income? I'm also starting up my own business. My net worth as never been over 6k.

What do you mean by billed?

[Seeyounearertime]

BetsyMoo

I think i'm right in saying that "Spread Betting" is somewhat of a misnomer as it's not gambling per se as the name would suggest.
I believe under tax law, and i'm not a lawyer, that if you made a one of investment and made a profit then you're fine but if you continue trading then effectively you're a trader and are accountable to the tax man.

Unlike "matched betting" which is totally tax free as it falls under the laws of "Gambling"

[Seeyounearertime]

basically OP, if the tax man gets wind of what your are doing, effectively working as a traer, he will want a bit of your profit.

If you don't tell him about your profit and he find outs about it he will pop a little letter through your door asking for money.
as you're only earning a relatively low amount you "Should" be okay but it's still something you have to be wary of.

[GrumpyOldBag]

Spread betting is totally gambling!

You are just betting on the difference between things rather than absolute numbers.

So, say, the number of goals scored in a football match rather than who wins.

[Seeyounearertime]

www.tradingspreadbetting.com/trade/trading-and-taxes
Article references:
www.hmrc.gov.uk/manuals/bimmanual/BIM22020.htm

Directly from the article:

Is financial spread betting (be it derivatives, forex trading, whatever) gambling (hence not subject to tax), trading (hence subject to income tax) or investing (hence subject to CGT)?
Spread betting is essentially day trading with one important difference that no assets exchange hands – still if you get a market direction right you make money!
From BIM22015 “The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020 for exceptions). They are not taxable on the profits, nor do they receive relief for their losses.”
From BIM22020 “To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.”
My interpretation of this is that if you do something else for a living, which makes you realise a bit of cash could be made from a certain spread bet, it’s not a trade. But if what you are doing day in day out is spread betting, then it is a trade…

[GrumpyOldBag]

www.independent.co.uk/news/business/analysis-and-features/how-could-a-teacher-on-18000pa-lose-280000-spread-betting-10115157.html

[Calamariss]

Now I'm even more confused.

I assumed it was no different to the lottery or horse racing as far as tax? I don't own anything, I'm just speculating.

[Seeyounearertime]

ther eis also a slight difference between "Spread betting" and "CFD Trading"

Which you will find info on here:
www.cmcmarkets.com/en-gb/learn-spread-betting/spread-betting-vs-cfd

Taken directly from that link:
CFDs:
Since you don't own the underlying asset when trading CFDs, there is no stamp duty to pay*. However, you will be subject to capital gains tax.

[Calamariss]

Sorry I think that's ridiculous. Just because you are doing it daily doesn't make it a trade.

Else scratch cards would be a trade.

Tax wise should I be fine as I've made and lost paper gains of thousands, but only ever cashed out a few hundred? I've been up thousands before and lost it all, but it was all profits.

[dratsea]

Betting tax paid by company offering cfd? So nothing to do with taxman?

[wannaBe]

Spread betting is slightly different to CFD. Spread betting is gambling on an outcome - no trade takes place because you are simply gambling on e.g. Whether something goes up or down and then closing at a point which meets your satisfaction. No money changes hands until you close the bet. So you could be £500 up, the unemployment figures get released and suddenly your bet drops through the floor and the £500 you had showing on your bet is gone.

Could someone explain to me about matched betting though?

[PinkBallerina]

Yes CFD is taxable and don't think that a low overall P&L will go unnoticed, the frequency of trades will be noticed and you could well be persued by the tax man. There is much more transparency these days. You could leave UK, there are plenty of countries who don't tax such trading.

[thecitydoc]

to keep yourself right with DWP ask them if you have to declare. If people know you are on benefits and earning this extra cash someone might report you. Best to be honest with DWP. My wife received £1 extra per week on her ESA to cover our mortgage interest payments. When I paid the mortgage off - 4 months ago - she forgot to tell them and when we received form to send to building society to confirm we were still paying mortgage she spoke to DWP to tell them of our error one of the advisors accused her of fraud even though the amount of over payment was just over £20.

[AnchorDownDeepBreath]

Winnings from gambling usually aren't taxable, but the profit is declarable.

I would tell the DWP because I imagine your JSA will stop as soon as they notice the profit in your bank account, and you'll probably end up with a hefty overpayment, too.

It may be that they won't count it as income but unless it's changed recently, they will.

[Seeyounearertime]

Could someone explain to me about matched betting though?

Matched betting at it's core is basically:
Man Utd Vs Arsenal
You bet at Ladbrokes that Man Utd will win
You bet at Coral that Arsenal will win
Either way, you win.
You then do that again with a promotional free bet and if the free bet wins, you keep the money, if the free bet loses you don't lose because your "Matched" bet covers it.
(there is a lot more to it but that is the basic. fans of matched betting say you can get a few hundred a month, i found it to be less and it's effort and time etc. I thin ki worked it out that i'd have been better off getting a minimum wage job for 20 hours a week)

[FingerOFudge]

if it is a trade (not sure that it is), surely you would treat it as a business, i.e. wait till the end of the tax year and declare the year's profits, or loss. Just because you make money in a particular 2 months doesn't mean you won't lose in the next two months... or not do it for 2 months. Just as if you're a plumber, you don't do a job and immediately pay tax on what you earnt, you wait to see how the whole tax year pans out. Though we are heading to wards the end of the year of course! It sounds like you'll be well within your personal allowance in any case, as far as paying income tax is concerned. As for benefits, I don't know anything about that! But as PPs have said, I'd be careful.

[iwantbrewstersmillions]

Spread betting is gambling. I do matched betting and it's a lot better and risk free!

[GooseberryRoolz]

Can you explain them both simply millions?