Binary options uk tax account who can make treaties and money
This publication is available at https: The principal law on GBD is contained in the Finance Act c26, Part 3 Chapter 1 sections toChapter 4 sections to and schedules 27, 28 and In Great Britain, gambling regulation — with a view to protecting the vulnerable and keeping out crime - is mainly under the Gambling Act Spread betting is subject to the regulatory requirements imposed by the Financial Services and Markets Act Text in this notice which has the force of law is indicated by being placed in a box.
In other words, remote gambling operators pay UK gambling duty on their gross gambling profits from UK customers no matter where in the world the operators are located. This notice is only concerned with GBD. Please see Notice a: A UK person is defined for these purposes at section of the Act as either - an individual who usually lives in the UK or a body corporate which is legally constituted in the UK. Bookmakers must keep appropriate records to enable them to verify whether customers are UK persons that is, whether they usually binary options uk tax account who can make treaties and money in the UK or whether they usually live outside the UK.
Bookmakers have a responsibility to keep their records on customer location up to date. These records must be capable of audit by HMRC. All bookmakers should initially require their customers to state the address at which they usually live at the time the customer registers to bet with the bookmaker.
If no address is given the customer will be regarded as being a UK person. In cases of a verification system returning a conflicting result, with some information indicating the customer is a UK person and other information indicating the contrary, then the following tests should be applied. If 2 current pieces of information indicate a UK address the customer will be deemed to be a UK person regardless of their statement that they live elsewhere.
If any 2 or more of these information items are known to the bookmaker and they return a result indicating residence in the UK, then irrespective of whether the customer has provided an address outside the UK, they must treat that customer as a UK person for the purposes of gambling duties taxation.
We expect a robust system to have in-built verification but are not prescriptive about what that verification has to be. Where the steps specified above also concern record keeping, statutory provision is made at section 9 below.
Stake money is to be treated as falling due when the bet binary options uk tax account who can make treaties and money made, regardless of when it is actually paid, see paragraph 3. The amount of winnings is determined by the total value of the stakes in the pool and the number of winners. It is standard practice for you as bookmaker to retain a portion of these stakes either before or after putting them into the pool.
If you take a commission before the stakes go in the pool, and another afterwards, you would need to add together these 2 sums. The most straightforward scenario for duty calculation purposes, would be when the operator takes their commission from the stakes before any money goes into the pool, as it should be easy for the operator to identify all UK stakes.
Duty would be chargeable on that commission taken from UK customers. On the other hand it may be more difficult to identify which of the stakes came from UK or non-UK customers, if commission is taken after the stakes go into the pool. In the case of pool betting on horse racing or dog racing, where the pool comprises contributions from only UK customers, duty is due on the whole amounts taken out of the pool for purposes other than the payment of winnings below described as deductions.
Where the pool comprises contributions binary options uk tax account who can make treaties and money both UK and non-UK customers, you must calculate the amount liable to duty only on the UK portion of those deductions. You carry out this apportionment by looking at the amount of stakes due from UK customers as a proportion of the stakes due from all customers, that is, both UK and non-UK.
This apportionment is applied as follows:. In some circumstances you may have to top up the pool. In order to determine the appropriate proportion, you must use the same calculation that you use to apportion the amounts taken out. For pool betting on horse racing or dog racing, to calculate your profit, the law stipulates 5 steps that must be looked at.
Depending on the complexity of your arrangements you might need to consider all 5 steps, or might not need to go beyond step 1 or 2. Take the total amount of stakes payable by UK customers and deduct the total of that amount that you assign to the pool. The remainder is included in your duty calculation.
If you use any amount in the pool for purposes other than to pay winnings, calculate the UK portion of this binary options uk tax account who can make treaties and money. You need to do this by first of all dividing the amount of UK contributions to the pool by the total amount of UK and non-UK contributions.
This will give you the UK fraction of the pool. If you add any money to the pool to top up the winnings you must also calculate the UK portion of this top up sum by multiplying it by the same proportion as done at step 2.
The bookmaker believes the closing position of the index will fall within this spread and customers are invited to bet whether the index will close at a higher, or lower, position than the quoted spread. Spread bets can be based on financial indexes, such as fluctuations in the value of stock markets, or non-financial indexes such as the number of runs scored in a cricket match or goals scored in a football match. A binary option is a type of betting product that is commonly offered by spread bet bookmakers.
Recent changes to the Financial Services and Markets Act mean that from 4 January dealing in binary options is a regulated activity. For GBD this means that from 4 January binary options will no longer be taxed as binary options uk tax account who can make treaties and money bets.
Betting exchanges calculate their duty liability on the charges they make, such as their commission, to their customers. GBD is charged on any amount that a betting exchange charges to any UK person who uses its facilities to make bets, for example:. GBD is charged on bets other than on-course bets made by:. Bets that you take, as a bookmaker, through a betting exchange are no different from other bets that you take. You must still include these bets in your duty calculation.
As an on-course bookmaker, if you lay bets through a betting exchange you must register for GBD as an off-course bookmaker, not as a betting exchange. Only betting exchanges themselves must register as such for GBD. Returns Binary options uk tax account who can make treaties and money regulation 5. The statement need only show a single total profits figure for an accounting period. Betting exchanges are required to publish on the internet the process by which bookmakers may request a statement.
The process must be agreed with HMRC. Betting exchanges should approach HMRC about agreement of this process via gambling. Betting exchanges can take up to 14 days to provide the statement. The 14 days is calculated as being the later from either the date they receive the request or end date of the accounting period for which the bookmaker requests the information.
The amount of winnings can include:. Normally the issue of a statement to your customers will create this date. However, there may be occasions where you can show that they were notified earlier. You must show any loss in the relevant box on the GBD return. You can carry over any loss for each class of bets financial spread bets, non-financial spread bets or other bets from one accounting period into the next. This only applies within each class of bets. There is no binary options uk tax account who can make treaties and money relief for bad debts.
An on-course bet is not a general bet and so is not liable to GBD. All other bets are off-course bets and are liable to GBD. This includes bets made over the telephone, or any bets made through a betting exchange. Bets made by UK on-course bookmakers with off-course bookmakers are liable to duty. Anyone who lays a bet through a betting exchange in the course of their business, whether as on-course bookmaker or not, must account for duty on that bet.
On-course bookmakers accepting dutiable bets will be treated in the same way as off-course bookmakers and must register and complete returns in the same way see sections 4, 5 and 6by completing the boxes in the off-course betting section of the GBD return. As an on-course bookmaker accepting dutiable bets via a betting exchange, you must make sure that you complete the relevant boxes on the return even if these figures result in a loss.
Your net profit or loss figure will be provided from the statement of your account provided by the betting exchange you use. Duty is calculated only from the value of the bets made and the winnings paid out. These are bets one bookmaker makes with another.
For example if bookmaker A accepts a bet from a customer, then he must include the full stake due from, and any winnings paid out to, the customer in his GBD calculation. If bookmaker A then decides to hedge or lay-off some or all of the bet to bookmaker B, then bookmaker B must include the hedged or laid-off bet and any winnings he pays out, in his GBD calculation.
If the hedged bet is made with an on-course bookmaker, duty is only due on the original bet made by the customer with the off-course bookmaker. These are bets you may accept well in advance of the event and where you give specified odds. We may need proof that a bet has become void. GBD is due on a free bet or discounted bet as if it were a non-discounted cash bet. The notional value is the stake the customer would have paid but for the offer.
Equally, you can account for any cash winnings from free bets in the same way as any other winnings. Freeplays when used fall subject to the appropriate tax treatment. However, the tax treatment can differ for the different gambling duties. If you offer binary options uk tax account who can make treaties and money facilities, the duty liability for credit bets is calculated in the same way as other bets.
Applications for registration must be made at least 31 days before your intended start date. A paper registration application may only be made by a bookmaker not required to hold a ROL. Set up a Government Gateway account if not already set up by following all prompts. Enter your Government Gateway credentials to Register for gambling taxes. Complete the application in full through the GTS and follow all prompts. Keep records of the on-screen automatic acknowledgment confirming completion of the registration application, together with the unique acknowledgment reference number.
The applicant, in order to make a paper registration application, must complete form GBD1: