Tax question

Macspower

Well I supposed good and bad news really. Good news is I was a winning player last year. I knew that but not really to what extent... I was selfemployed and my accountant is currently doing up my account for last year. He phoned me yesterday and asked me about the lodgements from neteller to my account. I told him what they were and he thinks I should declare them as incomeand pay tax on them. He said that he would make some enquiries on the matter but I don't want him to open a can of worms....

The amount while quite substantial should (hopefully) be nothing compared to this years winnings. ( my plan is for a great year :rolleyes: )

Anyone know the law on this? does anyone pay taxes in this country on poker winnings?

PM me if you don't want to post in a public forum.

Many thanks,

Mac

phantom_lord

nope, you've no tax obligations on the winnings.

bohsman

No taxes on gambling winnings in Ireland, nor can you write off losses.

Ste05

Gambling income is all Tax Free, any Accountant worth his salt should have already known this.

Solksjaer

Ste05 wrote:

Gambling income is all Tax Free, any Accountant should have already known this.

Edit

Macspower

prob not worth his salt!!!! I'll go and inform the nit.....

LuckyLloyd

This post has been deleted.

Killme00

Macspower wrote:

Well I supposed good and bad news really. Good news is I was a winning player last year. I knew that but not really to what extent... I was selfemployed and my accountant is currently doing up my account for last year. He phoned me yesterday and asked me about the lodgements from neteller to my account. I told him what they were and he thinks I should declare them as incomeand pay tax on them. He said that he would make some enquiries on the matter but I don't want him to open a can of worms....

The amount while quite substantial should (hopefully) be nothing compared to this years winnings. ( my plan is for a great year :rolleyes: )

Anyone know the law on this? does anyone pay taxes in this country on poker winnings?

PM me if you don't want to post in a public forum.

Many thanks,

Mac

Poker winnings are classed as non Taxable Income...your accountant should have known this....get a new accountant, he's obviously a muppet

El Stuntman

could you all stop using the word accountant, I feel quite ill

ollyk1

Why are you paying this person money to do your accounts?? If he doesn't know this what else does he not know?? I'd be very worried if I were you.

Solksjaer

The poker winnings tax money was just 'resting' in my account Dougal.

MrPillowTalk

I would be worried about your accountants competance. Also it seems very silly to declare it at all, revenue see offshore accounts like neteller and alarm bells start going off in their heads.

Macspower

spoke to him there now. He had verified what you guys said since we spoke last. first time he came across it he said....... i think he's a junior of some sort because he couldn't believe that you could make money from online poker. It wasn't a large amount of money but he said it was more than he made last year.

I'd say he's well motivated today ..... lol

Mac

LuckyLloyd

This post has been deleted.

Mr.Plough

hmmm. so isnt it better that that they didnt prove poker was a game of skill?

if they did then surely we would all have to start paying tax?

eggie

Accountancy is a broad subject, not all accountants cover all subjects - Tax being big enough to specialise in alone.

padser

I think people are going a bit overboard on the accountant. Assuming he doesn't play poker, and has never done the accounts of a winning poker player/gambler before how would he know that poker winnings are not taxxable?

I doubt its a mainstream topic when studying accountancy.....

MrPillowTalk

Mr.Plough wrote:

hmmm. so isnt it better that that they didnt prove poker was a game of skill?

if they did then surely we would all have to start paying tax?

This has been one of my main arguments for leaving the whole subject area alone with the govt.

Edit: All accountants should know that gambling income is not taxable, its fairly basic stuff.

ollyk1

padser wrote:

I think people are going a bit overboard on the accountant. Assuming he doesn't play poker, and has never done the accounts of a winning poker player/gambler before how would he know that poker winnings are not taxxable?

I doubt its a mainstream topic when studying accountancy.....

I'd expect a person dealing with people finances (and charging hefty fees for their "expertise") to understand the tax treatment of income earned from contracts for difference and spreadbetting, both of which are treated as income from gambling by the Irish Revenue and therefore not to subject to income tax.

There is no difference in dealing with poker winnings or income earned from betting on horses or from cfds or spredbetting on the markets. Anyone dealing with people with significant earnings should have seen some income from a "gambling" activity of some form at a very early stage. This guy sounds very junior to me.

When I employ an expert and he demonstrates to me that he doesn't know something that seems fairly standard if "slightly" non standard to me I don't wait until I've lost a couiple of €kkk before I start asking questions. That's my approach to these matters but it's your money and you can do what you like with it.


42% of €20k = €8,400 at what point do you start asking questions??

By the way I think Boards should get some commision Macs!!

ollyk1

MrPillowTalk wrote:

This has been one of my main arguments for leaving the whole subject area alone with the govt.

I disagree Eoin for the reason that in light of the government backing down very quickly on the idea of taxing income earned on CFDs they don't have a leg to stand on in respect of any proposal to tax other gambling earnings.

The pool of winning players in poker is very small compared to the pool of people making money (and much more money) from the markets.

The best place from the govt to make money from poker is by regulating the industry and taxing the casinos profits anything else is nonsensical in the long run.

Wreck

Mr.Plough wrote:

hmmm. so isnt it better that that they didnt prove poker was a game of skill?

if they did then surely we would all have to start paying tax?

This is probably what will happen eventually, as the government are extremely unlikely to ignore this potential source of revenue, especially if poker continues to rise in popularity.

I can't believe even a trainee accountant didn't know that income from poker isn't taxed. It is actually included as part of the tax syllabus for first year trainee's, and it is something (one of the few things ) I can actually remember being mentioned in lectures.

Ste05

IMO the main reason Gambling income is not taxable is because, if it was, it would have to be possible to write off Gambling losses against your taxes.

MrPillowTalk

ollyk1 wrote:

I disagree Eoin for the reason that in light of the government backing down very quickly on the idea of taxing income earned on CFDs they don't have a leg to stand on in respect of any proposal to tax other gambling earnings.

The pool of winning players in poker is very small compared to the pool of people making money (and much more money) from the markets.

The best place from the govt to make money from poker is by regulating the industry and taxing the casinos profits anything else is nonsensical in the long run.

I think they could well make a case whereby if your sole income/or a substantial ammount of your income is derived from gambling on games of skill/luck then it should be taxable.

Also they could set up a taxation system similar to the way they tax income from property and class poker/gambling income as "unearned" when anyone who works in property will tell you its anything but unearned. Im not exactly sure how it would work but I think they could then get away with making gambling losses non tax deductable but gambling invome over a limit taxable.

Macspower

MrPillowTalk wrote:

I would be worried about your accountants competance. Also it seems very silly to declare it at all, revenue see offshore accounts like neteller and alarm bells start going off in their heads.

I was going to have a word in the bosses ear but I don't want to get the young lad in trouble but I will be going through the books when I get them back.

I now have a special account for poker but at the time it was going into my company account (stupid I know). guaranteed they wont know this year

Mac

loadabollocks

i am a trainee accountant and i can tell you there is a hell of a lot of stuff i dont' know. this chap is most likely in the same position as i am. you get to deal with clients and if there is something you don't know, you ASK. that's how learning works in a lot of cases. give the chap a break ffs.

Goodluck2me

this is pretty basic stuff imo, revenue law only have a few major areas. Schedule D/E and you should know what falls into what i.e. that Gambling amongst others doesnt...

its not like he has to learn the Stuff inside out

PiperT

bohsman wrote:

No taxes on gambling winnings in Ireland, nor can you write off losses.

As far as I am aware, if you are a professional gambler (i.e. gambling is your sole source of income) then your winnings are considered as income for tax purposes. There are obvious ways around this but I think this is the technical position as far as revenue are concerned.

In Macspowers case, he is self employed and therefore his supplementary gambling income is tax exempt.

Macspower

In fairness to the chap he phoned me to ask me about the lodgements and when I told him he said he wished I hadn't put them into my business account as he may now need to count them as income. He said he would check it out and get back to me but I posted here first.... When I spoke to him the second time he was amazed that there are people out there making a living at poker in Ireland. What may complicate things a bit is that I bought some macinery for the business from my winnings.I think he said that he may have to count it as new capital from personal resourses...or something to that effect..

Do the guys in the UK have t pay taxes?? was looking at 2+2 and there is a full section on it..

Goodluck2me

PiperT wrote:

As far as I am aware, if you are a professional gambler (i.e. gambling is your sole source of income) then your winnings are considered as income for tax purposes. .

that is incorrect. whether it is your sole income or not it doenst count.

dermot_sheehan

According to Graham v. Green (Inspector of Taxes) [1925] All E.R. Rep. 690; 9 Tax Cas. 309. gambling winnings are not taxable, even if sole source of income:

Apart from certain bank deposit interest, an individual's sole means of livelihood was, and had been for many years, betting on horses from his private residence with bookmakers at starting prices only. He was assessed to income tax under Schedule D in respect of his betting transactions, and the General Commissioners, on appeal, confirmed the assessment. Held, that his winnings from betting were not profits or gains assessable to income tax, Schedule D, either under Case I or Case II as from a trade or vocation, or under Case VI.

MacStacked

gabhain7 wrote:

gambling winnings are not taxable, even if sole source of income:

From what I am aware this is untrue. I spoke with a very senior accountant last week and we spoke about this specifically for a period. To quote him exactly "if you were to claim poker earnings as your sole source of income for an entire year it would not be tax free..no way."

pigeonbutler

Unsure about what was said about income from CFD's being tax-free, that's quite baffling.
From my memory of studying tax just a few months ago the exemption on gambling income was worded as "income from casual gambling". I always assumed that meant that betting on horses on Saturdays and having a few big wins would be tax free, whereas being a bookmaker one's income would certainly not be exempt from income tax.

My (fairly unlearned) opinion (ask me again in 4 years time when I've passed ACA and ITI exams!) would be that there is no definitive answer as to whether a person whose primary income was earned from regular (their "days work") poker playing was liable to income tax. The legislation and case law of old refers to "casual gambling income" and is of a time when people bet on horses and dogs and couldn't expect long term +EV and so didn't envisage professional poker play.

Therefore I'd think that this ambigous situation will remain until someone reports a major income derived from poker (upwards of €250k per annum for a number of years) and claims it to be exempt from income tax. At that juncture the revenue may challenge this exemption and it will be left to the courts to decide what the position is. Even if the courts find in favour of the poker players the joy may be shortlived as it is common for interpretations of tax law that revenue finds unfavourable to be made redundant by new watertight provisions in the following Finance Act!!

Macspower

In this country I always found that your no allowed to be doing nothing.... ie your employed/self employed or unemployed. I had terrible trouble a few years ago after a year of not working.. I didn't sign on and I wasn't in prison(only other option on the form). They couldn't accept that I wasn't working or signing on....... I took a year off to build my house but that was unacceptable to them....

Mac

robinlacey

why would you report your income if it wasn't taxable?

i haven't had any contact with anyone to do with tax since i left my last job a few years ago,and i certainly don't have an accountant,is this ok?

kpnuts

robinlacey wrote:

why would you report your income if it wasn't taxable?

i haven't had any contact with anyone to do with tax since i left my last job a few years ago,and i certainly don't have an accountant,is this ok?

Same as that, Robin. I researched it at the time I was quitting work and as far as I am aware, pro card players have zero tax liability.

eggie

Even though it may not be taxable as such, I would keep records of the income nonetheless, cause if the taxman asks and you cant prove where it came from he can still assess you for a liability to tax should he believe it is warranted.

robinlacey

eggie wrote:

Even though it may not be taxable as such, I would keep records of the income nonetheless, cause if the taxman asks and you cant prove where it came from he can still assess you for a liability to tax should he believe it is warranted.

what do you mean by keeping records?
all the money that has gone into my bank account is transfers from poker sites,i don't have records as such but i've never deleted emails from the sites so i presume i could use those as records?

eggie

robinlacey wrote:

what do you mean by keeping records?
all the money that has gone into my bank account is transfers from poker sites,i don't have records as such but i've never deleted emails from the sites so i presume i could use those as records?

E-mails, records of transfers, deposits & withdrawals, etc would be sufficient.
It would do no harm to keep a folder, with hard copies (even in chronological order if you wanted:D ) for peace of mind. You might never need to fall back on them but it would be prudent to do so.

pigeonbutler

Eggie is spot on. Keeping records is still a legal requirement as it is dodgy territory to have large unexplained amounts of income. A good example is the Horse racing Industry where income from Stud farming is exempt from income tax, however the law requires stud farmers to declare their income none the less. Ditto for musicians, painters, novelists, etc. that are claiming the artists exemption.

Killme00

pigeonbutler wrote:

Eggie is spot on. Keeping records is still a legal requirement as it is dodgy territory to have large unexplained amounts of income. A good example is the Horse racing Industry where income from Stud farming is exempt from income tax, however the law requires stud farmers to declare their income none the less. Ditto for musicians, painters, novelists, etc. that are claiming the artists exemption.

Keeping records of income is advisable but not a requirement. It is advisable if the revenue decide to inspect your earning but in that case the burden of proof is with them, not with you. The would need to prove your income is not from poker and not you prove that it does.

eggie

The taxman does not need to prove where your income derived from, but merely reasonbale doubt in the absence of provision of records by the subject being assessed. If this wasnt the case, tax default, money laundering, etc would be so much easier.

ZZR1100

MacStacked wrote:

From what I am aware this is untrue. I spoke with a very senior accountant last week and we spoke about this specifically for a period. To quote him exactly "if you were to claim poker earnings as your sole source of income for an entire year it would not be tax free..no way."

i got this from my accountant too. he first thought poker earnings were taxable but after enquiring with the tax office he changed his mind.
the problem is, whether you are casual or pro is if revenue try to tax your earnings from poker, you ae also entitled to offset your losses against your earnings. If your losses outweigh your earnings then they owe you money.
thats a can of worms they dont want to mess with.
as far as bookies go . they never lose long term -- every1 knows that

Macspower

real CAN O'WORMS i opened... but I think it's important to discuss nevertheless..

Mac

Ste05

We have similar threads periodically. I think it was just about the right time for another. Although the Sole income angle is a new one, and an entry by gabhain7 on the subject has to be welcomed.

So I'll give this thread an A+, good job Mac

MrPillowTalk

Its important if your making a considerable sum from poker to keep records so you can prove that the money is derived from poker.

Also dont think that neteller lodgements will be accepted as proof, in the eyes of a revenue inspector doing an audit neteller will just appear to be an off shore bank account, hence its important to keep emails etc from poker sites as you withdraw to neteller.

Let me explain when it would become most relevant, say you earn enough from poker to buy a House/apt etc and choose to do so. If it happens to come to the revenues attention that x hasnt been in employment for y no of years but has just purchased a house paying a considerable balance of the purchase monies without borrowing for them, then you can be sure x will be selected for an audit of some kind.

Having been audited a number of times in different businesses let me tell you this, even when everthing is in order and nothing is dodgy the revenue knocking on your door is just bound to cost you money somewhere, and they are ruthless, I wouldnt like to have no records and try to justify a lump of cash sitting in my account.

dK1NG

gabhain7 wrote:

According to Graham v. Green (Inspector of Taxes) [1925] All E.R. Rep. 690; 9 Tax Cas. 309. gambling winnings are not taxable, even if sole source of income:

thats an English precedent tho - have hte Irish courts made any ruling on this?

Killme00 wrote:

Keeping records of income is advisable but not a requirement. It is advisable if the revenue decide to inspect your earning but in that case the burden of proof is with them, not with you. The would need to prove your income is not from poker and not you prove that it does.

eggie wrote:

The taxman does not need to prove where your income derived from, but merely reasonbale doubt in the absence of provision of records by the subject being assessed. If this wasnt the case, tax default, money laundering, etc would be so much easier.

would this not come within the 'peculiar knowledge' principle? as such, you would have to prove where it came from, as opposed to the burden being on them.

MrPillowTalk wrote:

Its important if your making a considerable sum from poker to keep records so you can prove that the money is derived from poker.
...
Let me explain when it would become most relevant, say you earn enough from poker to buy a House/apt etc and choose to do so. If it happens to come to the revenues attention that x hasnt been in employment for y no of years but has just purchased a house paying a considerable balance of the purchase monies without borrowing for them, then you can be sure x will be selected for an audit of some kind.

if that happens, CAB turn up on your doorstep, and next thing you know - you're bending over and touching your toes. . . . . . . :eek:

pok3rplaya

Sorry to bump this stuff again as I know it's been discussed a lot.

However, I've read a few threads on the matter now and I've been trying to do my own research but I still haven't found what I wauld call a difinitive answer on the matter.

From reading this thread I'm pretty confident that poker winnings are non taxable but since this will be my first year as a professional (non student) player I really want to be 100% sure. I've tried to searching the revenue website for answers (there search function is balls btw) but to no avail. I was about to contact them to ask for myself but I am reluctant to do this for obvious reasons incase it turns out that we are somehow wrong and I get my ass audited.

So is there anyone out there who can point out to me some sort of official webpage which has the difinitive stance of the Irish Revenue Comission as I can't seem to find it anywhere. I mean surely there must be some place that has a list of non taxable incomes? If not, I'm also interested to know who I should approach for answers on the matter? I want to put this issue to bed.

Macspower

Jeez I thought I had got the lid back on this Cano'worms :rolleyes:

But it is important to discuss and still opinions vary... at the time I was self employed wih my own business and in that year I had withdrawn 28k from neteller to my business account. In the end it wasn't included as income but they did need to "explain it" and simply put it in as extra capital from personal resources...... don't know if this was the right course of action...

spoke to my accountant about it at length and he advised on a seperate account for poker.....

I was telling him that I was now playing full time and asked if he was sure I had no tax liability.... he said he wasn't sure but the last thing he wanted to do was to phone the revenue and ask them... he said that winnings from gambling were tax free but he wondered what would happen if you decided to buy a home from your poker winnings and that it would surely raise a red flag.... everyone in this countryis supposed to be either of 4 things.
a) employed and in the PAYE system
b) self employed and making tax returns every year
c) unemployed and claiming allowance
d) in full time education

not much room outside this? wonder should I sign on the dole :rolleyes:


I have still to get a definitave answer on this

ArmaniJeanss

I'd guess that the Revenue themselves don't yet know whether it is taxable or not.
My understanding of how they operate (I have a friend who is a RevenueCommissioner) is that a lot of the time they don't know whether something is taxable or not, and its only when they consider the amount to be large enough that they go to the expense of investigating and getting a definitive answer one way or the other.

pok3rplaya

Macspower wrote: »

spoke to my accountant about it at length and he advised on a seperate account for poker.....

Separate from what, the account that your salary is paid into?

Macspower wrote: »

he said he wasn't sure but the last thing he wanted to do was to phone the revenue and ask them... he said that winnings from gambling were tax free but he wondered what would happen if you decided to buy a home from your poker winnings

I've thought of this. Can I not just hire an accountant to ring the tax office and inquire without implicating me? All he has to do is pretend he is personally curious.

Yes I'm sure it would look super suspicious if I was to buy a house after being non-existent in the tax system for a year or two. However, if I am completely above board etc. then I don't really have anything to worry about right? I might get audited or whatever but if I'm legit then what is the worry?

pok3rplaya

ArmaniJeanss wrote: »

I'd guess that the Revenue themselves don't yet know whether it is taxable or not.
My understanding of how they operate (I have a friend who is a RevenueCommissioner) is that a lot of the time they don't know whether something is taxable or not, and its only when they consider the amount to be large enough that they go to the expense of investigating and getting a definitive answer one way or the other.

Yes I suspect this is the case myself. Afaik though the way they decide on these issues is to make an example of someone and bring them to court and then that court case basically decides the fate of everyone else in a similar position to the defendant, presently and in the future.

I'd rather not be the example.