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hi! I've been playing a lot at a local place that does a lot of competitive board games, both free & buy-in. I'm just curious, are the winnings from something like this meant to be taxable, or do they count as gambling? I've been using this salary calculator recently, and while I haven't actually won much from the tournaments, if I add all my winnings up it does put me in the first tax band (I was super close to it anyway). Is this something I should watch out for/declare to hmrc? Just curious what you would do.

Cheers!

From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

 Kriswall wrote:
From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

In practice, even if you have winnings that reach the threshold of taxability, yiou'd then be able to deduct any expenses related to those winnings. So, for 40k, that makes the odds of actual net winnings pretty low. For boardgames, it'll be easier, but there's some creative stuff you can do, at least in the US.

If they're in the UK and doing cash games they need to be registered so have a word with their compliance person for guidance (unless it's changed recently).

 Polonius wrote:

 Kriswall wrote:
From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

In practice, even if you have winnings that reach the threshold of taxability, yiou'd then be able to deduct any expenses related to those winnings. So, for 40k, that makes the odds of actual net winnings pretty low. For boardgames, it'll be easier, but there's some creative stuff you can do, at least in the US.

You'd be surprised by how many people don't itemize deductions. If you take the standard deduction, you can't really deduct expenses related to those winnings.

But yes, creative tax accounting can work wonders for your tax liability.

seeking wrote:hi! I've been playing a lot at a local place that does a lot of competitive board games, both free & buy-in. I'm just curious, are the winnings from something like this meant to be taxable, or do they count as gambling? I've been using this salary calculator recently, and while I haven't actually won much from the tournaments, if I add all my winnings up it does put me in the first tax band (I was super close to it anyway). Is this something I should watch out for/declare to hmrc? Just curious what you would do.

Cheers!

Polonius wrote:

 Kriswall wrote:
From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

In practice, even if you have winnings that reach the threshold of taxability, yiou'd then be able to deduct any expenses related to those winnings. So, for 40k, that makes the odds of actual net winnings pretty low. For boardgames, it'll be easier, but there's some creative stuff you can do, at least in the US.

I can't imagine, unless someone told HMRC, that they'd pick up on the money. They're fairly small wagers in the grand scheme of things, general max winning is about £50 if you've got a beast of a game going. I know you can deduct expenses in a business environment, like if you're registered as a sole trader or self employed, but not sure about myself on PAYE (pay as you earn)

beast_gts wrote:If they're in the UK and doing cash games they need to be registered so have a word with their compliance person for guidance (unless it's changed recently).

As far as I know they are registered, but I'll definitely find out who's responsibility that is and see if they know anything.

 Polonius wrote:


You'd be surprised by how many people don't itemize deductions. If you take the standard deduction, you can't really deduct expenses related to those winnings.

But yes, creative tax accounting can work wonders for your tax liability.

This has come up a fair bit, I think if I can do it and figure out what I can deduct it'd probably keep me out of that tax band.

Thanks for the replies all, super helpful so far! Also my apologies if my formatting is weird, still getting used to BBCode & formattig forum posts and it's all totally new to me!

Cheers!

 Kriswall wrote:
From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

Most people winning money also have no clue they're supposed to pay taxes on it. Tax laws are convoluted and confusing and the IRS doesn't actually hunt down people who won money playing miniature wargames.

If presented as store. Credit yes. Which is the case in most small pay outs.

Of course you're supposed to pay tax on it!

Treat it like a business, and deduct your travel costs, your paint, the miniatures you used...

Oh, wait, you actually lost money?

Given recent governments slash and burn approach to public services you'd have to get pretty unlucky for HMRC to take any kind of interest over such small amounts

stratigo wrote:

 Kriswall wrote:
From a US perspective, anyone who earns over $600 (combined over the course of a year) in (among other things) "prizes and awards", should be claiming it as income on a 1099-MISC form.

HOWEVER... with few exceptions (eSports, large poker tournaments, large casino winnings), the tax authority will never know that you earned the money and will have no idea that you are supposed to be filing the form. I'm NOT recommending tax evasion. I'm simply saying that most people probably don't even realize they're supposed to be claiming this income as taxable and also don't get caught for not doing so.

No idea how things work in the UK, but I'd guess it's similar.

Most people winning money also have no clue they're supposed to pay taxes on it. Tax laws are convoluted and confusing and the IRS doesn't actually hunt down people who won money playing miniature wargames.

That's pretty much what I was saying.

I'm pretty sure that in the UK there is an allowance for things like for example selling stuff on eBay which I'd imagine this would fall into. So long as you're not earning thousands a year, you'd probably be in the clear. Even if you did and even being PAYE, you can still register for self assessment and by the time you claimed back the various expenses involved such as travel costs, paints, tools, miniatures, etc, the amount you'd end up owing would probably be negligable and it's entirely possible they could end up owing you a small amount instead. If you were receiving JSA or UC it would be different and you probably should be declaring that as they'd almost certainly consider it income even if not work.

However, I'm obviously not a tax accountant, if you're really concerned I'd suggest speaking to Citizen's Advice firstly and seeking proper professional advice if necessary. I'd imagine that the response would basically be "Don't worry about it" though.