# Betfair Premium Charge – How It’s Calculated (and How to Avoid It)

Posted on Posted in Betdaq, Betfair

The reality is, you probably don’t qualify for Betfair premium charge yet…

If you do, unlucky. This post will help…

Plenty make the lower threshold (20%). But don’t let it stop you, it’s only a small obstacle.

Now I’ll explain how they are calculated in the simplest format I know. Despite Betfairs explanations, many still don’t seem to get it…

## Betfair Premium Charges – How Do You Qualify?

Once you meet the qualifying criteria below you become eligible to pay Betfair premium charges:

• Bet on more than 250 markets (lifetime of account)
• Profitable account (lifetime of account)
• Total charges equate to less than 20% of your profit (lifetime of account)

From this point you then have a Betfair Premium Charge ‘allowance’ which equates to £1,000 worth of premium charges. Until recently, this was displayed on your premium charge statement before you began to pay.

If you’re not sure about how much commission you’ve generated, markets bet on or how profitable your account is (lifetime) don’t worry, you’re not profitable yet.

Once you meet the 3 criteria above, you will receive a delightful email informing you that your account now qualifies, congratulations! (you always used to get an email anyway, not sure if they still do it).

You will also see the tab shown in the image at the top of this post appear within your account section of the website. This is the link to your ‘Premium Portal’. All the information from the qualifying points listed above will be shown, along with the weeks commission, profit and expected Betfair Premium Charge due.

Premium Charge = % of weeks profit – weeks generated commission

So assuming you profited £1,000 this week, the premium charge (20%) would be £200 minus the commission you generated over the week (charged at 4.9% on wins). So if your generated commission was £40 you’d pay £160 making the figure up to £200.

The upper % levels kick in at £250,000 net profit. The same calculation applies, but with the additional rates.

At the bottom of your Premium Charge statement you will see the current state of your ‘allowance’ starting at £1,000. Counting down to 0 each week you qualify for a payment. From 0 onwards, you pay every Wednesday at around lunchtime-ish.

One thing to note: when you start paying it, make sure there’s enough in your account. I’ve heard horror stories of those trading on the afternoon have opened a trade for the liability of their account and then found they can’t close out because the payment has been taken while the trade was open. I’m not sure if there is anything in place to stop that happening now as it happened to someone I spoke to some time ago.

Premium Charge Exclusions: Single wins accounting for 50% or more of gross profits are excluded from the weeks calculation. In trading that’s extremely unlikely, especially if you’ve been profitable for any period of time.

#### How Can We Avoid Paying the Betfair Premium Charge?

1. Increase generated commission: easier said than done, unless you’re an automated trader and can find a break-even strategy. And then it would need to be scalable too, in order to increased generated comms significantly.
2. Arbing at value: by doing this you could make a couple of quid on the way too. Although like generating more commission, bookies are wise to arbers and traders now. Betting at any kind of value with the bookies is likely to be short-lived, making it quite tiresome. It’s not impossible, but for the time spent finding an arb to play the return is low in my opinion. Avoiding some PC is the added value of course, but if the arb loses and you win on the exchange you could face paying extra premium charges. Less than ideal.
3. Multiple accounts: accounts in others names, addresses and IP’s. This brings many problems and isn’t right on many levels, bringing additional risks as well. Betfair have a ‘premium charge evasion team’ that can suspend and investigate your account.
4. Use Betdaq more: It’s the only one that makes any sense to me. Liquidity on Betdaq is low, but there has been improvement over the last 2 years. Premium charges don’t exist on Betdaq, and commission is lower.

Disclaimer: I am not telling anyone to do the above in point 3. I’m just aware that this has gone on in the past by multiple Betfair users. Betfair has its own Premium Charge avoidance measures and have frozen accounts, although with the highest premium charge at 60% I’m not all that surprised some have resorted to this.

#### Betfair Removed £52,000 From Customers Account

Back in 2011 Betfair premium charge team reportedly removed £52,000 from one customers account for ‘premium charge avoidance’. The harshest point being they seem to be able to act as judge, jury and executioner all in one foul swoop. There’s a full article here courtesy of the telegraph should you want to read it (it’s fairly long).

I couldn’t see any other articles online at the time of writing so would assume he didn’t get it back.

#### Betfair Premium Charge In Summary:

Little can be done, except producing profit more! Or rolling the dice with extra accounts…

By adding the upper levels of Premium Charge Betfair have created a deter-ant to new traders. Learning to trade can be tricky at the best of times, the last thing you want to hear if 40-60% could be swiped from you when you reach the upper levels of success.

But remember… that’s exactly what it is. The upper levels.

As gambling in the UK is tax free 20% isn’t too much of a problem. Betfair premium charge above 40% certainly is though. If you’re new to the game it’s best to start off small, use other exchanges like Betdaq and consider counter-measures like arbing early.

Top Post: 3 Simple Horse Racing Trading Strategies

#### 17 thoughts on “Betfair Premium Charge – How It’s Calculated (and How to Avoid It)”

1. Tried to make it that way, thanks 🙂 there is something a little else extra but it’s not even worth mentioning as it just makes it all more confusing and very little difference on the bottom line.

1. Jay28 says:

A friend of mine has been successful at trading football team news for many years and for a while he used multiple accounts in family members names to avoid PC. Eventually he got hit with a 5 figure charge when betfair linked the accounts, they took the money straight out of his account and informed him afterwards. I guessing they caught him through IP addresses but who knows. Definitely not a wise thing to do!

1. Yes, not worth the risk. I read in the news when they caught someone and took around 30k out of their account… may have even been the same person.

1. Jay28 says:

I think that must of been another instance, as I know it was more like £12k taken from the guy i know. Just goes to show they have no qualms about doing it. Makes me wonder how they would treat two traders living at the same address?

2. Dave says:

I think there is a way to get round this with multiple accounts but I am not going into it here. The only real solution to it is to use Betdaq more, but it would probably have to start on Saturdays and big meetings until confidence in the liquidity built up. Mind you if there was a wholesale switch to Betdaq they would probably introduce a premium charge.

1. of course but thats a serious risk to run…

2. Hannah says:

Fucking corporate mentality. Betfair is like “Guys we’ll just do all is in our power to suck all your money and if you try to avoid that you’re in deep shit, cuz we have legal solutions to take even more of your money, all for our holy corporate profit”. And the government is like “Oh casinos are annoyed by some shit and cry for help. HHMM what to do? dont really know so lets make a law.” Its like they have all the tools for profit and we need to try the hardest. I think this also makes us smarter than them. Top kek

3. Barrie Hutchison says:

We will always be on an uneven playing field. Not only do they charge outrages p/c they run away to the less tax that is Gibralter etc.

4. Peter says:

Hi Caan,
Great materials. Thanks.
Lets say, If I am up £20k in the last 6 month, should I already paying the 20%?
Sorry for my ignorance.
Thanks.
Peter

1. Hi Peter,

It depends entirely on your generated commission. Once you ‘qualify’ you will get a ‘premium charge’ tab turn up in the dash of your account and probably an email if they still do it.

It’s basically more than 250 markets, profitable account, generated commission below 20% of profit over the lifetime of your account, 1k allowance then starts, so you have a 5k buffer, if you’re 20k up, but you’ve generated 20k generated comms over the lifetime of your account you will not be paying PC. However if for example you are 20k up (fit the other criteria) and have 1k generated comms you’ll be paying it for sure.

Either way, dont worry until yo get the email/additional tab. Then you have the 1k pretend PC allowance.

5. Chris says:

What does it mean by 250 different markets? Is this 250 different sports?

Thanks

1. Betting markets, Chris. 250 races etc.

6. chris says:

IS there anywhere in BF that tells you how many you have bet on?

Thanks