Playing Poker As A Small Business

[GrowsOnTrees]

First off apologies if this post isn't sitting in the right forum but I couldn't see one that really fitted the post.

A friend and myself have been playing poker for 6 months or so playing SNG and a few MTT starting mostly on 5$ and moving up to $10 with a few $20 SNG's thrown in and so far we're winning (up $1000 - not quite enough to clothe and feed the kids or to retire on just yet but it's a profit).

We're unable and probably have no desire to "6 table for 12 hours a day" to make a living but we were wondering if anyone out there plays as a business, and if so are there any benefits to this. Where we're loosely coming from here is:-

1) Poker winnings - I'm not sure how it works in other countries but in the UK presumably they should be declared to the taxman (we haven't)? If you were a business could you pay yourself a minimum as directors of the company and the rest of the winnings/profits out as dividends tax free?

2) Could you claim back VAT on things like your cable / broadband & PC costs as a business?

3) Could you charge rent and claim back VAT on a room in your house?

4) If you were a legitimate business how would that stand you for playing two people in the same tournament? - presume something like the "crew" do. Could you avoid collusion?

As you can probably tell from the post we haven't much idea about how a small business works but we think there could be some small business benefits - read screw the taxman - to be had.

Thanks in advance for any thoughts / comments on this subject.

[autobet]

If you are only making a few thousand a year I wouldn't worry about paying taxes. You should technically, but I wonder how many do?

If you play poker for a living you are allowed to claim reasonble business expenses. For most pros that would be travel expenses. I suppose for Internet pros that would include you internet connection and home office. Again, how many of those are claiming income for tax purposes?

It is not collusion if two friends(business associates) play in the game or tournament as long as they play their own cards and do not alter their strategy. It would be collusion if they shared their hole cards and altered their strategy.

[AaronBrown]

Under US taxes, the main advantage to declaring yourself a professional is that you can deduct your gambling losses directly against winnings. Everyone else has to itemize losses (they are still limited by winnings), which means most people can't take advantage.

In principle, you can deduct expenses related to hobbies against hobby income, but the rules are easier if it's a profession.

It doesn't have to be your sole business, you can do it on the side. But you have to meet certain tests in the US, basically the commonsense ones of taking it seriously.

[byronkincaid]

there is no tax to pay in the UK on gambling winnings so no need to worry about anything else in your post

[FredBoots]

Canada has no tax on gambling winnings either. If you win a million on the lotto in Canada, you get a million. The only thing that is taxed is interest.