Tax On Gambling Winnings (UK)

One of the main reasons people enjoying online gambling is because it allows them to make winnings. However, one of the main questions users have is whether or not you have to pay tax on gambling winnings – UK players should continue reading to find out.

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Gambling Tax In The UK

When gambling first launched in the nation, winnings made while gambling was taxed. Today, however, gambling winnings are free from tax, which means that players based in the United Kingdom are able to keep all of their winnings once withdrawn.

This rule applies to winnings won both at brick-and-mortar casinos and online casinos too, so there’s nothing to worry about when it comes to making wins at casinos, regardless of how big the prize is. You can keep and enjoy everything you win.

While your winnings aren’t taxed, all gambling operators in the United Kingdom are charged a 15% tax levy on all gross profits that they must pay. All betting shops, casinos, poker rooms, and online casinos must pay this tax or risk penalties and other trouble from the UK Gambling Commission.

A Brief History Of Gambling In The UK

Gambling was legalised in the UK back around the 1960s and winnings made at brick-and-mortar casinos or betting shops were taxable. However, this changes shortly after the launch of online casinos in the late 90s and early 2000s, and when then-Chancellor of the Exchequer Gordon Brown scrapped the tax in 2001.

Four years later, the Gambling Act 2005 was introduced which led to the formation of the UK Gambling Commission, a large firm tasked with regulating both online and brick-and-mortar casinos to ensure that they offer fair games and promotions plus so much more.

Following the implementation of the Gambling Act 2005, many bookmakers and online gambling operators moved overseas to places like Gibraltar where they had to pay significantly less tax. However, an amendment made to the Gambling Act 2005 in 2014 forced all offshore companies operating in the UK to pay tax on their profits or risk losing their gambling operating license for the UK, a license supplied by the UK Gambling Commission.

This small change affected the UK’s gambling industry tremendously, forcing gambling operators to be more competitive against each other.

Do Other Countries Tax Gambling Winnings?

Yep! The UK is one of the few places that does not tax gambling winnings. However, there are many countries which do require punters to pay tax on their winnings, and they are:

  • United States
  • France
  • Macau
  • Spain
  • The Netherlands
  • Romania
  • Nigeria
  • Latvia

Meanwhile, other countries require you to pay tax on winnings from select games. For example, people in Portugal, Slovenia, and the Netherlands must pay tax on winnings from lottery over a certain amount. Meanwhile, users in South Africa must pay tax on winnings won on horse racing bets.

It’s also important that the tax you do have to pay on winnings will differ between countries and most of the countries that do not tax player winnings tax gambling operators instead. Similarly, what gambling operators pay will depend on the country but can include betting duty, bingo duty, gambling machine duty, lottery duty, remote betting duty, and more.

Playing Overseas: Worth It Or Not?

Some people play at online casinos from overseas because they believe winnings in the UK are taxed. However, as we’ve explained that isn’t the case since gambling operators are required to pay tax on all gross profits.

If you are registered with an overseas company, we suggest you leave and register with a company based in the UK. There are multiple reasons for this but the most important is that these overseas companies aren’t as safe as those based in the United Kingdom.

Overseas companies are not regulated by the UK Gambling Commission which means players registered at these sites aren’t as protected. The Commission ensures that all games provide players with a fair chance at winning and that all bonuses and promotions allow players to take winnings home. What’s more, overseas companies may impose strange restrictions on bonuses which may lead you to lose winnings, may take a long time to process withdrawals, may charge fees on withdrawals, may share your personal information, and may offer little to no customer support.

While most overseas gambling websites should be fine, there may be some that are unsafe. This is why we suggest you register only at a casino site that possesses a UK gambling license, protecting you, your personal information, and giving you a fair chance at making winnings. If you’re wondering which sites you should register with, just keep on reading.

Online Casinos You Should Register With

We’ve reviewed hundreds of UK online casinos and have come up with five of the best websites you should consider registering with if you’re looking at making winnings. Our recommendations, which you can find below, are all licensed by the UK Gambling Commission which means they’re completely safe to play at.

PlayOJO Casino

PlayOJO is widely considered one of the best online casinos in the UK and there are plenty of reasons for this. For example, the website offers hundreds of casino games, provides players with regular slot tournaments and daily promotions, accepts most major payment options, and it offers all new users a wager-free welcome bonus which means you’re able to keep all winnings made. If you’d like to know more about the welcome bonus, make sure to check out our PlayOJO review.

Mr Play

Mr Play is a prominent online casino brand in the UK. The site, which is known for its unique moustache-branding, offers a generous welcome bonus. The site is primarily known for its gambling opportunities being home to a wide selection of casino games as well as an excellent sports betting service. The website also has a loyalty program which offers long-term players lots of special benefits and rewards. You can find out more about the site by reading our Mr Play review.

The Grand Ivy Casino

The Grand Ivy Casino is a well-known online casino that is famous in the UK for offering a gigantic welcome package to all new customers. The site offers a large selection of casino games, and it has proven to be popular for its luxurious theme. You can read more about the site in our Grand Ivy Casino review.

SlotsMillion

SlotsMillion is another great online casino, although the site only offers video slots and jackpots. Currently, there is no welcome bonus for registering with the website but if you sign up you will be able to enjoy thousands of popular video slots from hundreds of different developers. You can also enjoy various jackpot games and compete in slot tournaments for big prizes. Interested? Read through our SlotsMillion review for more information.

Fun Casino

In short, Fun Casino is a fun online casino! The site offers plenty of casino games as well as a chance to play online lotto. It’s also home to a generous welcome package which includes a cashback bonus on losses. The customer support is great and the website accepts most major payment options too, allowing you to select your preferred methods. You can discover more about the site in our Fun Casino review.

How Does Gambling Tax Work With Professional Gamblers?

Gambling has become so big that there are now professional players who make a living with their income. Fortunately, for anyone who is a professional gambler, they are not taxed on winnings which again means they can keep everything.

Her Majesty’s Revenue and Customs (HMRC) does not differentiate winnings made between casual and professional players. The reason for this is because the HMRC does not recognise betting and gambling as trading, the HMRC Bussiness Income Manual reads: “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.”

However, it’s important to note that this only applies to winnings made in the UK and if you as a professional gambler attend events in other countries where you land wins, you may be required to pay tax on those winnings. We suggest you check before participating in any tournaments or events in other countries so you know whether or not you need to pay tax.

Even if you only play in the UK, we suggest you keep a record of all your winnings, and this applies to both casual and professional gamblers. It’s a good idea to do this so you can keep track of how much you make as well as keeping up-to-date on all of your losses and spending too.

Will The Rules Ever Change?

While news that the UK doesn’t tax winnings for both casual and professional gamblers, it’s important to understand that this currently only applies for winnings made right now and in the country. These rules can change at any time and in the future players may very well be required to pay tax on winnings, but this is unlikely as it could actually lead to a loss for the UK Government.

This is particularly important as the UK government is currently in the midst of reviewing the Gambling Act 2005, a review which could lead to some big changes regarding the gambling industry. Many MPs and other people have called for the reformation of current gambling law, and others have called for the UK Gambling Commission to be scrapped completely and replaced by a different organisation.

Nothing has been confirmed, but it’s always a possibility. This is why we also suggest you keep a record of all of your winnings, rules can be changed and with the ongoing review by the UK government, nothing is certain. If want to keep up-to-date on this, we suggest following our news channels.

Seeking Professional Help

If you’ve read all of this but are still feeling a little unsure about paying tax on winnings, particularly if you’re a professional gambler who plays in other countries on a regular basis, we suggest you seek our professional help.

A financial advisor can help you regarding gambling laws in other countries, particularly when it comes to sorting out tax payments on all winnings. Doing so can provide you with a better understanding of which countries may be better for you to play in.

Questions & Answers (FAQ)

Do professional gamblers have to pay tax?

Professional gamblers in the UK do not have to pay any income tax as the HMRC doesn’t recognise gambling and betting as an official trade. You can read more about this in our full page on tax winnings in the UK.

Do some countries tax gambling winnings?

Yes. There are many countries around the world which require gamblers to pay tax on their winnings. The amount required will differ between country so we suggest you try and find out before gambling in a different country.

Should I record all of my gambling winnings?

Although you’re not legally required, we suggest you do record all of your gambling winnings in order to keep track of what you win along with your losses and spending. This is particularly important for someone who gambles for a living.

Can I register overseas to avoid paying tax?

We suggest you avoid doing this as the UK does not require you to pay tax on gambling winnings. Playing at an overseas website can be incredibly dangerous and risky, and we urge you to only play at a UK-licensed online casino.

Do gambling operators have to pay tax?

Yes! Rather than you having to pay tax, the UK requires that all gambling operators, including those located offshore but offer services in the UK, pay tax on all gross profits.