Bet-ter safe than sorry on winnings

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Owners of South Yorkshire business who visited the St Leger meeting in Doncaster, with or without valued clients, should take care about what they do with any winnings, according to tax expert Andy Maxfield.

Mr Maxfield, senior manager in Grant Thornton’s Yorkshire tax investigations team, says the tax man is unlikely to accept that significant sums paid into bank accounts are the result of a successful punt, unless there are documents to back that up.

“Generally, people rarely retain proof that an unusual deposit into a bank account arose as a result of a gambling win,” says Mr Maxfield.

“If there are no supporting records, HM Revenue & Customs is likely to contend that the money came out of the business and tax it accordingly. This will apply whether the funds appear in the business accounts or the personal accounts of the owner or director.”

Andy Maxfield has dealt with cases HMRC contended that several thousand pounds that was paid into a private bank account had not been won, but was an undisclosed business profit, and asserted - unsuccessfully on that occasion - that more tax was due.

Mr Maxfield says business owners betting on sporting events should be advised to keep a record of their bets and winnings.

“Gambling on the taxman being understanding and willing to accept an unusual bank deposit as a big win would not attract favourable odds,” he says.