Gambling Tax Uk Winnings

admin  4/6/2022
11 Comments

You can win a lot of money gambling in the United States. Of course, that means you’re also subjected to a casino winnings tax. If you’ve made a trip to the U.S. And your gaming winnings are high enough or you win a prize and take the cash equivalent, the IRS will deduct 30% off of your winnings. Nobody wants Uncle Sam to withhold their.

  • Back in a day, UK punters did pay taxes on their gambling winnings. Those taxes were abolished in 2001 when Gordon Brown was Chancellor of the Exchequer. The Gambling Act of 2005 set up the legal frame for gambling in the UK. For the first time in history, it also regulated internet gambling.
  • For these players, gambling winnings are considered regular income for tax purposes, meaning that they are taxed at the normal income tax rate, rather than the gambling tax rate. All income and expenses for professional gamblers much be recorded on Schedule C, not Schedule A.
  • The second rule is that you can’t subtract the cost of gambling from your winnings. For example, if you win $620 from a horse race but it cost you $20 to bet, your taxable winnings are $620, not $600 (after subtracting your $20 wager). Cash is not the only kind of winnings you need to report.
  • Any winnings subject to a federal income-tax withholding requirement; If your winnings are reported on a Form W-2G, federal taxes are withheld at a flat rate of 24%. If you didn’t give the payer your tax ID number, the withholding rate is also 24%. Withholding is required when the winnings, minus the bet, are.

The high rollers among you will of course already be aware that your gambling winnings aren’t taxable in the UK. To be fair, even the smaller stakes players know this.

Here, we have a system in that we do not have to pay taxes on any of your winnings or stakes. And while this wasn’t always the case, today, this applies to all types of gambling, betting, poker, bingo slots and lotteries.

In many ways you are still paying tax on gambling it is just this is now put directly onto betting companies in the form of a point of cosumption tax. This 21% tax online and 15% in retail shops ultimately gets passed onto the customer through lower value odds and payouts. Once you do win money though it has effectively been pre-taxed and so you do not need to worry about paying any further tax at that stage.

If you do land that big one, or you simply make a lot of money through gambling in your life, you can rest assured knowing that HRMC are not entitled to a slice and can only watch on. That is until you want to give that money away or leave it to someone who will inherit it. Here we will look at that aspect of tax on gambling winnings.

History Of Gambling Tax In The UK

It wasn’t always so rosy for UK punters though. From 1960 through 2001, when Gordon Brown abolished gambling tax in that year’s budget, bettors could choose to pay 9% tax on either the stake (keeping it minimal) or their winnings (potentially all or nothing).

This changed just after the century however and a 15% tax on bookmakers and their gross profits was imposed on the point of supply instead. It was around this time that many UK bookmakers, led by BetVictor, moved their online operations offshore to Gibraltar where tax was capped at 1%.

In 2014, there was another alteration the 2005 Gambling Act when tax was changed to 15% on all gross profits at point of consumption including those firms holed up in Gibraltar and the Isle of Man. In 2019 the tax rate was increased to 21% for online betting.

Does this situation mean that people who use gambling as their main source of income earn a tax free living? Well, yes, even in the case of professional gamblers, winnings are not taxable.

Gambling winnings, therefore, remain tax-free, regardless of whether it’s your main source of income or just a bit of fun. The only counter to the rule being if a player is appearing somewhere for a fee, thus professionalising his or her appearance.

Spread betting also falls outside of these rules, it is actually classed as trading, meaning if you do it as your main source of income then you are liable to pay income tax on this for of gambling.

Gambling Tax Uk Winnings 2019

What About Inheriting Gambling Winnings?

While your winnings aren’t taxable by any gambling laws, other taxes may still apply, not least of all your winnings could be vulnerable to an inheritance tax when you die.

Inheritance tax is levied on property or cash that somebody acquires by means of a gift or, well, inheritance.

Gambling Winnings Tax Free Uk

If someone inherits your winnings they will be liable to inheritance tax so long as your estate is large enough. You might choose to get around this tax by giving your money away.

You can give away a tax free £3,000 annually to a person or even dish out up to £250 away in a gift to anyone you like so long as it is no more than £250.

Even if you do give your money away to a charity, it can still be taxed should you die within 7 years of your donation. Should you live longer than those 7 years, all monies will be exempt from the inheritance tax.

The threshold for this tax is £325,000.

Does This Only Apply To Big Amounts?

Not necessarily. You may have say £20,000 in gambling winnings saved as cash or assets, which of course would not be enough to be liable for inheritance tax on its own. If, however, the rest of your estate was worth over £325k then this money, no matter its source, will be added onto the top of that amount and if that takes you over the threshold there will be tax to pay.

Even if you use gambling winnings to buy a house and give this away in your inheritance it does not matter, the value of the house (or assest) will still be calculated as part of your estate.

The choice if you are in the situation is either to give your money away in small amounts over a number of years or face the fact it could be liable for inheritiance tax.

Gambling Tax Uk Winnings Money

If you live in the United Kingdom and enjoy gambling, then you’ve probably wondered at some point if you should be paying taxes to make sure that you are on the legal side of things.

Whether we’re talking about lottery winning taxes, casino winnings taxes for slots, table games or even live casino, you need to know what the legal procedures are so that you never get negatively surprised by anything.

So how much money can you win from gambling without paying taxes in the UK? The short answer? All of it. Gambling winnings aren’t taxable in the UK. While other countries will tax anywhere between 1% and 25%, the UK won’t care if you’ve won £10 or £10.000.000. No matter what kind of gambling you’re doing from bingo to horse racing and everything in between, there will be no gambling winning tax in the UK.

Even if you’re a UK citizen and want to gamble abroad, most times you shouldn’t worry about taxes because the UK has treaties with most countries, so you won’t be affected by their tax requirements.

Gambling wasn’t always free in the UK and the gambling history is quite complicated. Betting first started being regulated in 1960 but there was a 9% tax. It was abolished in 2001 and replaced with a 15% tax on bookmakers, but if the bookmaker wasn’t based in the UK they didn’t have to pay it which meant losing revenue to offshore sites.

Gambling tax uk winnings tax

Gambling Winnings Tax Rate Uk


The amendment to the 2005 Gambling Act in 2014 chanced things so that the 15% tax was on all gross profits at the point of consumption to include offshore companies as well. This meant that operating in the UK without a UK licence would be illegal. The thing is that the tax is paid by operators, so bettors don’t need to worry about it.

There are taxes related to gambling that will affect you if you live in the UK. Bigger wins can be subject to income tax that’s 18% and there’s also an inheritance tax when you die. The threshold for this one is £325.000 and everything bigger than that will be subject to a 40% tax. Even gifts are subject to tax and you can give up £3000 each year tax-free to any one person, but if you die within 7 years they will be taxed on it.

All in all, there is no tax on gambling, and you might want to look for non gamstop casinos, but there are different taxes you should take into account. The best thing to do if you end up winning big is to look for a financial advisor to help protect your money.