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Question: Withdrawals from EU and income tax (United Kingdom)

Dusk

Dusk

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In the Auction House, selling my shit.
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Trinity Dusk Trinity
In the event that I make a cash withdrawal from Entropia Universe do I have to declare it, as a UK resident, to the Great British tax man?

Or could I claim that I've put in more down the years than I'm getting back and so try to justify not paying taxes?

Alternatively, could I say that EU is a huge casino with large elements of chance and so, in common with online gambling, there is no tax payable? (At least thats my understanding of online gambling - I could be wrong)

A bit about me. I've never yet withdrawn any cash from Entropia, I do a regular day job and so I'm taxed at source and always have been. I've never previously filled out a tax form in my life.

Thanks in advance for any useful advise.
 
Dusk said:
In the event that I make a cash withdrawal from Entropia Universe do I have to declare it, as a UK resident, to the Great British tax man?

Or could I claim that I've put in more down the years than I'm getting back and so try to justify not paying taxes?

Alternatively, could I say that EU is a huge casino with large elements of chance and so, in common with online gambling, there is no tax payable? (At least thats my understanding of online gambling - I could be wrong)

A bit about me. I've never yet withdrawn any cash from Entropia, I do a regular day job and so I'm taxed at source and always have been. I've never previously filled out a tax form in my life.

Thanks in advance for any useful advise.
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The tax you need to be aware of as a Uk resident is Capital Gains Tax (CGT)

https://www.gov.uk/capital-gains-tax/overview

Capital Gains Tax allowances

You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount).

Tax year Tax-free allowance
6 April 2015 to 5 April 2016 £11,100

I'm not an accountant, but unless you have done exceptionally well in a single year, I dont think you will have anything to worry about.

This is something I looked into when I was doing a lot of share dealing and the tax free allowance was a lot lower back then (£4500 ish)
 
In the US our losses are considered deductible , though it must be for the year of which it is filed.

Hopefully you wont have to itemize each loss as to the cause.

Armor decay: 58 ped
Fap decay : 24 ped - that one might raise a flag as if its a porno

Could be an interesting audit
 
Considering that PED purchases are a form of consumption, I consider a withdrawal a "refund".

Only if you really start to make an income, you'll have to declare it (not CLD income though, at least, not in Holland, as that is revenue from capital, which is treated differently).
 
Call the HMRC tax advice line on 0300 200 3300.

I think you'll find that a) they won't know what you're talking about, but b) if they do work it out they'll consider that you need to pay income tax. In the UK you need to pay income tax on all earnings above the income tax threshold, except for a few things that are specifically exempt such as certain benefit payments, or interest from ISAs, and some things that are covered by different rules such as inheritance.

I don't think it can be considered gambling income because MA don't pay UK gambling duties.

I don't think it will be capital gains because that applies to sales of property, shares and business assets which is not what you're doing here - your income here comes as a payment from MA and you haven't sold an asset to them.

I don't think you will be able to claim against deposits unless you have declared them as an expense in previous tax years. Any deposits in the same tax year should be claimable though.

I'd be interested to know what HMRC tell you.
 
Oleg said:
Call the HMRC tax advice line on 0300 200 3300.

<snip>

I'd be interested to know what HMRC tell you.
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yes I would be too and I think that as soon as you fill out one of those self assesment forms , you will generally then have to do one every year , its like they "gotcha".
 
Oleg said:
I don't think it will be capital gains because that applies to sales of property, shares and business assets which is not what you're doing here - your income here comes as a payment from MA and you haven't sold an asset to them.
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Fascinating.

So, is it income, or is it a refund?

And I'm guessing the key word here is asset.

Someone else in the UK must've gone through this process.

Please guys, continue the debate.
 
SoReal said:
yes I would be too and I think that as soon as you fill out one of those self assesment forms , you will generally then have to do one every year , its like they "gotcha".
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No, you only need to do self assessment when you have earnings that aren't covered by PAYE. You can do it as a one-off. HMRC will assume that you need to do it again the following year though, unless you tell them otherwise, so you need to keep them informed.

Self assessment is quite easy to do if your self-employed earnings are low, and if you don't have to mess around with capital gains, dividend payments etc, especially if you're not having to work out deductible expenses.
 
Oleg said:
No, you only need to do self assessment when you have earnings that aren't covered by PAYE. You can do it as a one-off. HMRC will assume that you need to do it again the following year though, unless you tell them otherwise, so you need to keep them informed.

Self assessment is quite easy to do if your self-employed earnings are low, and if you don't have to mess around with capital gains, dividend payments etc, especially if you're not having to work out deductible expenses.
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ahh ok , must have changed then

Some links here about it might help.

http://www.contractoruk.com/news/0011303taxman_offer_opt_out_self_assessment.html

http://www.telegraph.co.uk/finance/...ed-to-fill-in-a-self-assessment-tax-form.html

I would definately speak to them first ,chances are they wont have a clue and will just give you general advice. Also remember they will fine you £100 if your late with sending in the form , thing is when does a withdrawl in EU become taxable , I would imagine when it hits your bank account.

Another thing to consider is that taxes should really only apply to profits and if your withdrawl is less than your deposits possibly you might not have to pay anything as you have made a "loss".
 
It's Capital Gain.

Buy item for £1000 sell for £2000, capital gain is £1000. Its under the threshold, no tax payable (unless you have a sideline selling new items on Ebay, trading shares or a 2nd hand car dealer)

Invest in Entropia £1000 (ie deposit) Chip out sell your stuff get paid £2000 capital gain is £1000. No tax payable (if none of the above is applicable)

But if you want HMRC on your back, thats up to you.
 
If you are not registered for self assessment ( ie self employed, company director etc) then you would have to register specifically just to pay that. Did you make money in Entropia? Did you get out more than you paid in?
 
Dusk said:
Definitely not.
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Capital Loss then, you have even less to worry about, but I feel others disagree with me on this one.

Might want to ask who has made a withdrawal and who hasn't. ;)
 
You won't owe any tax. You made a loss, that rules out capital gains. You are not in business, so scrap corpy tax, Vat and the like. You are not a sole trader, and neither should you declare as one, as the transaction was neither profitable for you, intended to be profitable and it is occasional. For something that you have made a loss with, and is occasional, you should not have to register for self assessment.

If you were intending to make profit, sometimes profiting, and regularly making withdrawals then it would be different. :)



Oh wait ... I mean.... Yeah they will tax you a shit load! 20% Vat, 10% corpy tax and it will bump you into the higher rate tax band on your self asses.. So... You can't leave... K? ;)
 
Alainax said:
You won't owe any tax. You made a loss, that rules out capital gains. You are not in business, so scrap corpy tax, Vat and the like. You are not a sole trader, and neither should you declare as one, as the transaction was neither profitable for you, intended to be profitable and it is occasional. For something that you have made a loss with, and is occasional, you should not have to register for self assessment.

If you were intending to make profit, sometimes profiting, and regularly making withdrawals then it would be different. :)
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What she said.

Go buy a nice graphic card or something and take it easy. :smoke:


(Then come back in 2016 with <100hp)
 
Dusk said:
Definitely not.
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Do NOT call the tax office.

The last thing you need to set yourself up filling in self assessment form every year. Once you do one, you've always got to do one. I kid you not, the tax man will say "I'll send you a form, explain it all on there, we will contact you".....robot style, once in the machine it will be a nightmare to get back out.

If you're PAYE (most are unless self employed), you don't need to complete a self assessment. There're exceptions, although not worth going into that. Keep it like that.

Income is earning off investments, such as funny enough weekly CLD payments and income from LA's. However as long as you don't convert it to real currency, you can ignore it. It's monopoly money while used in game.

Capital gain, is profit you make selling the physical asset. That's basically any "plus" MU on anything you sell. Again...unless you pull it out the game it doesn't matter. Not to mention as Mega said there's an allowance. It used to be over £8K a year, probably higher now.

Even if you make any MU or income, if you're spending it in game and losing it, then "it's gone". There is no profit.

Basically if you deposits are higher than your withdrawals, then you have nothing to worry about.


Rick
 
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The allowance isn't per item it's per person and if you're earning over that amount already then it's taxable and if they do it as a business then you've got national insurance as well.

My brother was getting self assessment forms from HMRC but managed to finally convince them he was PAYE.

This might be more helpful

http://www.which.co.uk/money/tax/guides/capital-gains-tax-explained/capital-gains-tax-allowances-and-rates/

According to that we might be able to class EU as a 'wasting asset' but again that would to be confirmed by HMRC. Although I think in the eula it states we don't own anything in EU.
 
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Mega said:
It's Capital Gain.

Buy item for £1000 sell for £2000, capital gain is £1000. Its under the threshold, no tax payable (unless you have a sideline selling new items on Ebay, trading shares or a 2nd hand car dealer)

Invest in Entropia £1000 (ie deposit) Chip out sell your stuff get paid £2000 capital gain is £1000. No tax payable (if none of the above is applicable)

But if you want HMRC on your back, thats up to you.
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That won't hold, because that implies you can deduct the deposits you make from your taxes, making this game a paid-by-the-govt-to-play.
 
SpikeBlack said:
This might be more helpful

http://www.which.co.uk/money/tax/guides/capital-gains-tax-explained/capital-gains-tax-allowances-and-rates/

According to that we might be able to class EU as a 'wasting asset' but again that would to be confirmed by HMRC. Although I think in the eula it states we don't own anything in EU.
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I've finally had time to look at the link. I'm not sure the wasting asset argument would work in the eyes of the tax man.

Mega said:
Might want to ask who has made a withdrawal and who hasn't.
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This.

It's still as clear as mud.

I'm sure someone in the UK must've withdrawn and either declared it or not.

I'm keen to stay on the right side of the law but if the waters are so muddied that I cannot see the line below....
 
Dusk said:
I'm sure someone in the UK must've withdrawn and either declared it or not.
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Whether they did or didn't, doesn't mean they were right unless they also got some professional advice.

Phone the HMRC line, that's what it's for.
 
Dusk it's as clear as day.

But I tell you what, if you tell us the values involved we will clear it up for you.

1) what is your withdrawal value?
2) Is your total depo value, more than that withdrawal?


Look....

The tax office have attempted to get their hands into online gaming a number of times, every time they've tried to count ingame transaction as "work" not entertainment they've failed. If you call them, you could potentially stir up a lot of sh*t, and help them attack us.

They will say "even the players want to be taxed" MA will be pissed as well

But putting all that aside, let me look at the values and clear it up for you. Even if you PM me.

It's more than a personal tax issue, it's about the entire industry. Don't help the tax man f** the business.

I tried to not make it so obvious as this in writing, but now I've spelt it out.


Rick

ps: I lose money like most people, so I've nothing to gain from this, other than the taxman forcing every gamer to complete a self assessment.
 
My possible withdrawal, I am 99.7% certain, will be less than the amount I've deposited over the last ten years.

RickEngland said:
The tax office have attempted to get their hands into online gaming a number of times, every time they've tried to count ingame transaction as "work" not entertainment they've failed. If you call them, you could potentially stir up a lot of sh*t, and help them attack us.
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The gaming, not work angle is one I'd not previously considered. But then this is why I asked the question in the first place.

RickEngland said:
They will say "even the players want to be taxed" MA will be pissed as well
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MA being pissed off at me is the least of my concerns.


RickEngland said:
I tried to not make it so obvious as this in writing, but now I've spelt it out.
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Well, I'm not a tax expert and this is a forum and so this is why I asked the question.

I'd rather *not* pay tax, but I'm getting conflicting answers. While I'd love to go with Mega's initial response to me, part of me feels its not as simple as that. Especially when others then dissent that answer. It is sure to put doubt in to my mind.
 
Deleted, I'm out.

Although for you to be stressing over it, we must be talking 10's of thousands. If it's less than £10K this thread should've have even started.

Rick
 
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