Money Laundering


J

John

Say you had a large sum of cash that the tax-man didn't know about. Say you
split that sum into lots of pieces, used each piece to bet on the favourite
and kept 90% of your initial sum. If you kept the winning tickets and lost
the losing ones, would the winning betting tickets be enough to convince the
tax man that you are just a lucky person and the money is clean?

Cheers

John
 
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H

Harvey Barvey

John said:
Say you had a large sum of cash that the tax-man didn't know about. Say you
split that sum into lots of pieces, used each piece to bet on the favourite
and kept 90% of your initial sum. If you kept the winning tickets and lost
the losing ones, would the winning betting tickets be enough to convince the
tax man that you are just a lucky person and the money is clean?

Cheers

John
I'm into money laundering!

I left my wallet in my trouser pocket when they went in the washing machine
sadly. I just hope the authorities don't find out.
 
J

Jon Griffey

John said:
Say you had a large sum of cash that the tax-man didn't know about. Say you
split that sum into lots of pieces, used each piece to bet on the favourite
and kept 90% of your initial sum. If you kept the winning tickets and lost
the losing ones, would the winning betting tickets be enough to convince the
tax man that you are just a lucky person and the money is clean?

Cheers

John
I think that they have heard this one before!

The Revenue would say that all other things being equal, bookmakers
generally make an overall profit so therefore the average punter makes a
loss over time, i.e. so must you.
--
Jon Griffey FCCA ATII
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.griffey.demon.co.uk

See website for disclaimers
 
J

John Court

Jon Griffey said:
I think that they have heard this one before!

The Revenue would say that all other things being equal, bookmakers
generally make an overall profit so therefore the average punter makes a
loss over time, i.e. so must you.
<snip>

Would they get away with that? Is there some sort of "allowed luck factor"?
The whole idea of "The Revenue" using a probabilistic argument to force you
to pay them money seems absurd. Say for example the expected return on
gambling is 90%. I have £50 000 of legitimate cash. Now if I then convert
that to £500 000 (1000% return), I am only 11 and a bit times luckier than
the man on the street. Compare that to the bloody lottery and it sounds
positively likely. If I were to increase the stakes so that each bet was for
say £20 000 at good odds then I might only need 5 winners. And that's just a
good day's racing. I don't have the dirty money yet, but this sounds much
more fun that giving it to some bloody accountant (with all due respect of
course!)
 
T

Tim

Say for example the expected return on
gambling is 90%.
You mean that for every £100 down, you get back £90?
I have £50 000 of legitimate cash. Now if I then convert
that to £500 000 (1000% return), I am only 11 and a bit times luckier than
the man on the street.
Are you sure it is "11+" times luckier?

Take another example:

You toss a coin twenty times & get 10 heads & ten tails. The game was to
get as many (say) heads as possible, hence you only have average luck.

I toss a coin twenty times & get 20 heads. Wahaaaaay! I win. But, more
importantly, would you say that my luck is *twice* yours? What would I have
got if I was *three* times as lucky?? ( ... or 10 times?! )
 
J

Jon Griffey

John Court said:
Would they get away with that? Is there some sort of "allowed luck factor"?
The whole idea of "The Revenue" using a probabilistic argument to force you
to pay them money seems absurd. Say for example the expected return on
gambling is 90%. I have £50 000 of legitimate cash. Now if I then convert
that to £500 000 (1000% return), I am only 11 and a bit times luckier than
the man on the street. Compare that to the bloody lottery and it sounds
positively likely. If I were to increase the stakes so that each bet was for
say £20 000 at good odds then I might only need 5 winners. And that's just a
good day's racing. I don't have the dirty money yet, but this sounds much
more fun that giving it to some bloody accountant (with all due respect of
course!)
What may well happen is that this apparent increase in wealth that is
explained away as betting winnings is assessed by the Inland Revenue as
additional (concealed) taxable income (e.g. self-employment).

Ultimately you have the right to put your case before the Commissioners
(tribunal) who may or may not accept your argument. You really need
rock solid evidence in order to stand any chance of convincing them as
they no doubt hear the same story all the time.
--
Jon Griffey FCCA ATII
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.griffey.demon.co.uk

See website for disclaimers
 
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J

John Court

Tim said:
You mean that for every £100 down, you get back £90?
That's right. Expected money after investing £100.
Are you sure it is "11+" times luckier?
Well, if I start with 50000 then man-on-the-street 90% would give you 45000.
If I win 500000 then that is 500000/45000 = 11.1 times more money QED 11+
times luckier. Yes, that makes sense to me. Perhaps I should define luck
more formally. Luck (as far as I am concerned) is the factor by which the
expected return (if it can be numerically quantified) must be multiplied to
give the actual return. Thus someone who (in a particular event) has Luck >
1 has been lucky and someone who has Luck < 1 has been unlucky.
Man-on-the-street (mentioned above) ALWAYS (!) has luck of 1. I bet some
boring bloody actuary is going to tell me that a statistician decided to do
it a different way in about 1920. Never mind.
Take another example:

You toss a coin twenty times & get 10 heads & ten tails. The game was to
get as many (say) heads as possible, hence you only have average luck.

I toss a coin twenty times & get 20 heads. Wahaaaaay! I win. But, more
importantly, would you say that my luck is *twice* yours? What would I have
got if I was *three* times as lucky?? ( ... or 10 times?! )
Aha! Lets apply the theory above. Someone who gets 20 has luck of 20/10 = 2.
Quite lucky. But you can't work it round the other way and say "what if he
was three times as lucky?". Luck (as far as I'm concerned) can be calculated
for a particular event, but is not some sort of intrinsic personal variable.
The idea of someone walking into a room with a luck factor of 4 and cleaning
out a casino with certain knowledge that he is going to do so is absurd
isn't it? The reason for this is that someone's luck can only be calculated
retrospectively (otherwise it rides a coach and six through basic
probability theory as I (naively) understand it).

Lets have some more examples. There must be a contradiction in the nonsense
I've just written. Surely!

John.

PS. Remember that Red Dwarf when lister injected luck. He went and hammered
about 8 digits into a keypad and opened a door. His luck there was something
obscene. But if he had typed in 10 digits (say) it would have been even more
obscene . So luck would have to mysteriously vary due to the difficulty of
the task achieved, which doesn't bode well for the intrinsic luck argument.
 

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