The feeling a person experiences when they win at a casino game or after placing a sports bet is hard to match. A mixture of relief and adrenaline goes through the body, while the excitement can be hard to contain.
After the dust settles, gamblers who were fortunate enough to succeed with their bets or win during a game of Jackpot Slots may wonder how they can go about ensuring their winnings are not getting them into trouble.
Not everyone is aware of the tax situation in the United Kingdom with respect to gambling. Some people assume that they must pay taxes on the money they win, regardless of whether they are playing at a physical casino, online, or at another location. Others may not even give the idea of reporting their gambling winnings a second thought.
Anyone who has recently won a significant sum while gambling may be wondering how they can appropriately report their winnings to the Inland Revenue. Below is our rundown of whether you need to pay taxes in the UK on gambling winnings.
Are There Gambling Taxes In The UK?
If you have lived in, or spent time in, the United States, you may assume that everything you do involving money will be taxed by the government. While that may be how things are done in the USA, the UK has a very different approach to gambling and taxation.
When you bet money at a live casino, bookmakers, website, or app, you do not have to report your winnings to the Inland Revenue. There are zero taxes on gambling winnings, regardless of where you are playing, how much you bet, or how much you’ve won.
The lack of taxation on betting and gambling is a significant reason for people to come to the UK and play their favourite games, if they are playing competitively or as their profession. Rather than having to pay anywhere from 1% to 25% in taxes in places such as the USA, France, and Macau, they can take home all their winnings.
The Abolishment Of Gambling Duties
The UK government enacted a staggering change to the way they approached gambling winnings in 2001. A law passed that ensured UK players did not have to pay any taxes on their winnings. The law even applies to anyone who is visiting or spending time in the UK on a valid visa.
One of the reasons such a law was passed was due to its popularity with the general public. Most people in the UK have a relationship with gambling. They will bet on horse races, football games, other sporting events, casino games, and jackpot slots.
The feeling of winning at slots is exhilarating. When you see those three or five numbers or symbols arrive one by one, and they are all the same, you know that you have experienced the luckiest day of your life. Such a feeling is made even better by knowing that 100% of that money stays with you, and none of it goes to the government.
Taxes On Casinos And Gambling Sites
Anyone running a casino, bookmakers, or online gambling or betting website must pay taxes if they are catering to United Kingdom players. The taxes are presently at 15% for all gambling income for companies. Such a law ensures that the UK government is still collecting a significant income from all the money that its citizens are wagering, but they are not taxing the average person when they win.
People who are unfamiliar with the laws in the UK may assume that such a policy results in reduced earnings, but that could not be further from the truth, as the UK in fact boasted over £2.9 billion in gambling duties in 2018. The figures are similar, or have risen, in subsequent years.
Gamble Responsibly In The UK
When you are gambling or placing bets on sports games in the UK, ensure you are doing so responsibly. The first step is to verify the identity and authenticity of the website or app you are using if you are not going to a physical casino or bookmakers.
There are so many sites and apps that enable people to play casino games and bet on sports matches. Ensuring you are using a site that is licensed to operate in the UK is very important. If you were to have any issues while using the site, such as not being paid out for winning a bet or having a tough time withdrawing your funds, you cannot approach the authorities for help if you are using an unlicensed site.
The laws towards gamblers are extremely favourable in the UK, as the government is fully aware of the passion that many of its citizens have for betting. The most significant benefit of the UK laws towards gambling is that you will never have to pay a penny of tax on your winnings.