Online Gambling Tax Uk

• Online Gambling Taxes
• Online Gambling Tax Uk Gov
• Online Gambling Tax Laws
• Online Gambling Tax Uk Online

If you've ever won a jackpot through bingo, slots or the lottery, you might have wondered if your winnings are taxable...

UK Gambling Tax System: The tax system for UK gambling is very advantageous for the players. Not only does it would work in your favour but it is also very easy to understand and follow their rules and regulations. Whenever you play casino games in the UK, you don't need to pay any tax to the government, whatever it is. The UK does not tax gambling winnings. In fact, even British gamblers who play abroad won't need to worry as the UK has treaties with other countries, so you won't be affected by their tax. Known as the point of consumption tax, all online casino, poker, and sports betting operators serving customers in the UK must now pay 15% tax on all profits accrued through their British services. In 2019/20 betting and gaming tax receipts amount to just over 3 billion British pounds, which was also the highest amount collected in the provided time period.

If you find yourself lucky enough to win big, do you have to declare it and pay taxes? If that thought has ever crossed your mind, you're in luck because BingoPort has you covered. We've put together a guide that will answer whether your winnings really are taxable, a brief history of gambling laws and a look at how this might impact you.

So, if you've bagged yourself a big jackpot, congratulations! If you're just here for the information, don't worry—we're sure your time will come someday.

Are Bingo Winnings Taxable?

The short answer is no—your gambling winnings aren't taxable, at least in the UK. Here you won't have to pay taxes on any of your winnings or stakes. It doesn't matter if you've won £100 or £1 million. This applies to all types of gambling—from bingo, to slots, to lotteries, and even horse racing. So if you win big, you can rest assured knowing that you can spend your money in whatever way you'd like.

Depending on the site you're using, your winnings will either be paid to you in one lump sum, or as a certain amount each month. If you've won recently, or you frequent a particular site, casino or betting brand, you should check their Terms and Conditions—this will lay out everything you need to know should your lucky day come.

If you don't live in the UK your winnings might be subject to a tax, so it's important that you check in advance. For example:

• France has a 2% tax on poker cash pots.
• In Spain, you need to declare winnings as income for taxation.
• The Netherlands has a 29% tax if you win more than €454 in the lottery.

If you're a UK citizen and you find yourself gambling abroad, you generally won't need to worry about taxes. Most countries have treaties with the UK, so you won't be subject to their tax requirements.

Gambling wasn't always tax-free however—check out the section below for a summary of the history of gambling and taxes in the UK.

History of Gambling Laws

Betting shows were first legalised with the 1960 Betting and Gaming Act, in which a tax was levied either on stakes or winnings in high street betting shops. This was charged at a whopping 9% for punters. It was abolished by Gordon Brown in his March budget of 2001.

This tax on gamblers themselves was replaced with a 15% tax on bookmakers and their gross profits at point of supply instead. This ‘point of supply' basis meant that if a bookmaker wasn't based in the UK, they weren't liable however. This was a pressing concern for Brown, who feared that the UK was losing revenue to offshore gambling sites.

In fact, more and more bookmakers moved their online operations offshore where they would only have to pay the local tax rate on profits—this was capped at 1% in Gibraltar!

This changed with an amendment to the 2005 Gambling Act in 2014. From this point, the tax was changed to 15% on all gross profits at point of consumption—including offshore companies. This meant that gambling operators in Gibraltar and the Isle of Man for example, were now obliged to pay tax in order to obtain a gambling licence. This amendment essentially made it illegal to operate in the UK without a UK gambling licence.

This had a huge impact in making UK-based bookies and betting shops more competitive—increasing the growth and success of the gambling industry in the UK.

So, Why Aren't They Taxable?

To put it simply, it's just easier for everyone involved to leave winnings untaxed. For example, if people are paying taxes on their winnings just like businesses do, then it would potentially be possible to claim back losses on tax returns. As you can imagine, this would be a nightmare, especially considering the fact that most people lose when it comes to gambling. After all, we all know what the 10 stages of losing at bingo are like!

Who Exactly Pays The Tax?

The casinos and bookmakers are the ones now paying the tax—this is the way they contribute to the UK's economy. There are a variety of different taxes and gambling duties:

• General betting duty
• Bingo duty
• Machine games duty
• Lottery duty
• Gaming duty
• Remote betting duty

Before you start thinking about how tough it must be for gambling businesses, or how great it might be for you, bear in mind that they do pass these costs on to you in some way. For example, some online gambling sites have high wagering requirements or lower odds.

What If You're A Professional Gambler?

When we say ‘professional gambler', we mean someone who essentially uses gambling as their main source of income. But even if this is the case and you are a professional gambler, the answer is still no—your winnings are not taxable.

This is backed up by the HMRC's Business Income Manual at BIM22015. Their position is that betting and gambling don't constitute trading:

'The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade'.

Gambling winnings, therefore, remain tax-free, regardless of whether it's your main source of income or a simple hobby. An example of this goes back as far as 1925, in which a man named Alexander Graham was taxed by Inland Revenue. Graham made a living out of betting on horses, so Inland Revenue claimed £300 from him under the 1918 Income Tax Act. This case went to court, where Graham's lawyers argued that betting on horses couldn't be considered a trade. The judge eventually ruled that you can't tax 'habit'.

That's not to say that professional gamblers can't ever be subject to tax. It can get a little bit complicated. For example, if a professional gambler is being paid an appearance fee for playing at a particular tournament, then this would be a type of income that would be liable for tax.

So, I Don't Have To Worry At All Then?

While your winnings aren't taxable by any gambling laws, that doesn't mean you don't have to worry. After all, other taxes may still be applicable.

A problem that many lottery winners have is extra tax—particularly on the ‘bigger' wins. Any income that you generate from your winnings could be subject to income tax—for example, income earned through investments would be subject to a capital gains tax at 18%! And that's not all—your winnings might even be liable to an inheritance tax when you die.

An inheritance tax is levied on property or cash acquired by a gift or inheritance. The threshold for this tax is £325,000, so if your ‘estate' is worth more than that, you're looking at a 40% tax. While you can give your money away to people or charities, it's still liable should you die within 7 years of the gift.

You can give away £3,000 each year tax-free to any one person, or £250 as a gift to someone as long as they're not gifted any further. If you give more than this away and you die, it will be liable to this tax. If you live longer than the allotted 7 years, it will be exempt from the inheritance tax.

If you do end up winning big—whether it's through bingo, the lottery or a casino—you should definitely look to a financial advisor for help on how to invest your money and how to protect it.

Before going out to buy your lottery tickets for the week, find out if the lottery is worth playing.

Conclusion

Well, there you have it. If you live in the UK, our tax laws mean that you can gamble tax-free, without a single worry. Generally speaking, it isn't very likely that this will ever change—taxing gambling winnings will never be viable for the UK. After all, if you tax the income or profit made from an activity, you have to make allowances for any losses made from the same activity.

Now you know that, you can keep playing bingo without a care in the world!

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Whether you gamble no more than a few quid per year or are an internationally known poker player, the United Kingdom is a great place to call home. Not only is gambling completely legal and fully regulated in the UK, but you'll be able to keep whatever you win. Although it might seem hard to fathom, gambling winnings are tax free for players in Scotland, Wales, Northern Ireland, and England. As you might expect, HM Revenue and Customs have no reason to cry poor, as they claim a sizable share by levying duties on gambling operators. Keep reading to learn all about the tax situation in Britain.

Is Gambling Taxable In The UK?

No, gambling is tax free in the UK. While players in some countries such as the USA, France, and Macau have to deal with gambling taxes between 1% and 25%, bettors in the United Kingdom have the privilege of keeping the entirety of their winnings. As a matter of fact, both online and offline gamblers in Britain don't have to waste their time thinking about taxes. If you've been gambling for a while, you might recall dealing with betting duties years ago, except Gordon Brown, who was Chancellor of the Exchequer at the time, scrapped that tax in 2001. Thanks to the sudden rise and perceived threat of offshore betting earlier this century, the government was effectively forced to enact several changes. Yet this move was just one of many important developments. The government also passed the Gambling Act 2005, established the UK Gambling Commission, and started regulating online casinos.

If you live in England, Scotland, Wales, or Northern Ireland, your gambling winnings are tax free whether you play live or on the internet.

Did you know the UK government makes a virtual killing from gambling? In the 2017-18 fiscal year alone, Her Majesty's Revenue and Customs raked in £2.9-billion in gaming-related duty. Although that figure includes lotteries, betting, and live as well as remote gaming, that's an astronomical amount. A great deal of that revenue comes from the 15% tax levy gambling operators must pay. While you don't have to worry about paying taxes when you win or lose, the government does tax betting shops, poker rooms, casinos, and other related establishments on their profits. Even though players don't pay these fees directly, in many ways they are built into the odds. Nonetheless, it's nice that you can concentrate on playing your favourite games instead of dealing with complicated tax forms.

• UK players do not pay taxes on their gambling winnings.
• The previous betting duty was abolished in 2001.
• Gambling sites now pay a 15% levy on their earnings.
• The government netted £2.9 billion in gambling duties during 2017/18.
• HMRC draws no distinction between pro and amateur players.
• If you gamble outside of Britain you may need to deal with foreign tax laws.
• The current tax code applies to online and offline betting.

Online Gambling Taxes

Placing Your Bets Offshore

Online Gambling Tax Uk Gov

If you've gambled online, you've likely noticed that the industry continues to evolve. That's true whether we are talking about the quality of the games, technological aspects like mobile betting, or regulatory and tax issues. As you might know, many of the sites that operate in the United Kingdom are based offshore. Some of these offshore operations were originally based in Britain, but quickly realised they could reduce their tax burden by locating their servers elsewhere and incorporating in a tax-free jurisdiction.

In order to counteract these moves, the UK Gambling Commission now requires all sites that welcome British customers to be fully licensed, whether they are physically based in Britain or elsewhere. In addition, these sites must also pay the same 15% tax as their British counterparts. Of course, as a player you won't have to deal with these taxes. Nevertheless, a level playing field reduces the odds of the government making changes that negatively impact bettors.

Are Professional Gamblers Taxed On Their Winnings?

No - HM Revenue and Customs do not make a distinction between casual and professional players. Even if this may be subject to change in the future, at the present time gambling isn't a recognised trade.

If you are a professional poker player, chances are you've already consulted with an accountant. Even so, there are a couple of points to consider. If you play outside of Britain, you may have to deal with local taxes. For example, if you win money in Las Vegas you could be subject to a federal withholding tax, although you can often apply for a refund as a non-resident. Also, if you become a poker celebrity and get paid for public appearances or representing an online cardroom, you could be subject to taxes but not on your winnings.

Keeping Records of Your Play

Although you don't need to declare your gambling income on your tax return in the United Kingdom, successful poker players and other professional bettors often maintain personal records of their wins and losses. While this might seem like a waste of time since your winnings are tax free, there are a couple of benefits to keeping some sort of performance log.

It's always smart to know how much you actually spend and win while gambling. Don't you want to know how much profit you've made after you factor in your losses and other expenses like travel, meals, and lodging? If gambling is your sole source of income, you could end up raising several red flags if you drive to the shops in an Aston Martin. Having gambling records will be ample proof that you aren't hiding income from taxable sources.

Frequently Asked Questions About Gambling Taxation in the UK

How much are gambling winnings taxed?

Gambling winnings are not currently taxed in the United Kingdom. Instead, casinos and other betting sites pay taxes on their profits. Remote gaming operators currently pay a 15% duty. Unless you plan on operating a casino, this will be of little concern to you.

Is gambling income taxable?

If you are a resident of the United Kingdom, your gambling income won't be taxed. Unlike other countries such as the USA, you'll be free to keep whatever you win in Britain even if you are a professional poker player. At the same time, you can't deduct any losses you might accrue.

How much money do you have to win at a casino to pay taxes?

It doesn't matter if you win £20 playing fruit machines or £2-million in a poker tournament. Your winnings will be tax free if you live in Britain.

Are blackjack winnings taxed?

No - If you live in the United Kingdom, you won't need to pay taxes on any money you win playing blackjack.

Are gambling winnings taxed in Scotland?

No - Scottish players can win big without worry about taxes. If you live or gamble in Scotland, you can keep whatever you win.

Will my winnings be taxed if I live in Northern Ireland?

No - You won't need to pay taxes on your gambling winning if you are a resident of Northern Ireland.

Do I have to pay tax on gambling in England?

No - As a player, you are not required to pay tax on gambling winnings in England. The government does generate sizable revenue from betting, as casinos, bookmakers, and other licensed gambling operators do pay taxes on their profits.

Are gambling winnings taxed in Wales?

Online Gambling Tax Laws

No - Gambling winnings aren't taxed in Wales. You'll be able to keep whatever you win whether you bet online or at a local venue.

Online Gambling Tax Uk Online

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