Money earned through fraudulent contract

Hi, During the 2022/23 tax year I earned £53,000 'trading' for a company called [Deleted by Admin]  The contract was signed on the understanding that I would be trading CFD's for [Deleted by Admin] and that I would be paid a profit split on the money I made. I made money and was paid my profit split. [Deleted by Admin] have been shut down by regulators in the US and Canada on the grounds that they have been running a ponzi type scheme and that actually none of their traders were actually trading CFD's on an exchange, we were simply trading within their servers and being paid from evaluation fees of other traders. were [Deleted by Admin] actively manipulating the trading conditions to make it difficult for traders to make any money because they only profited from sign up fees and any trader profits were taken straight out of their pockets rather than from the financial markets. I was not aware that the business was being operated in this way and ultimately my understanding is that I wasn't really trading and was effectively gambling against  [Deleted by Admin] in a simulated and highly manipulated environment. Where does this leave me with regard to my tax liability for 2022/23? Do I still pay income tax, because I earned money via this contract, or am I exempt from paying income tax  on these earnings because I was effectively betting against the firm? Thank you

[Company name deleted by Admin]

Hi Liam Hodgson,

It will be up to you to make the decision whether you were gambling or not.
Have a look at BIM56900 - Financial traders - instruments and shares: contracts for differences and spread betting which talks about the contracts For Differences (CFD's)
and then states to consider if the income is not liable to  income tax.  
HMRC would need to examine the contract to see if it is a gambling or wagering one.
Further advice can bf found at BIM22016 - Meaning of trade: exceptions and alternatives: betting and gambling - what is a bet? for the definition which again constitutes a wagering contract.

Thank you.

 

Thank you. I did check those references and do believe that I was gambling against the company. The contract is void because they did not provide the service they advertised and this is why the US and Canadian regulators have shut them down. The 'trades' I placed were not placed on an exchange and the conditions were heavily manipulated in the company's favour. It was basically unregulated spread betting.