If you're a keen online or offline gambler, then the chances are that at some point you've probably wondered whether or not you should be paying taxes on your winnings.
It makes sense, right? Winnings may be seen as a form of income and, therefore, it's natural to worry whether or not the taxman will want his cut at some point.
The good news, for UK players, gambling winnings aren't taxable. This means you can keep all of your winnings without having to pay any taxes – not a single penny!
That being said, if you are concerned about exactly how the UK gambling tax laws work, then look no further.
On this page, you can find out all about how gambling taxes work in the UK and abroad, and what else you should consider.
Gambling Taxes In the UK – Key Points
💰 UK casino players do not pay taxes on their gambling winnings, no matter how much money they win
💰 Gambling sites and casinos pay their own taxes on their earnings
💰 There is no tax distinction between amateur and professional players
💰 If you are travelling abroad to gamble, it's always wise to check out the taxation laws in the country your visiting
💰 Gambling winnings may be subject to other taxes, including inheritance tax
UK Gambling Taxes In Depth
Whilst casino players in countries such as the USA and France may have to deal with gambling taxes, UK gamblers are in luck.
As we mentioned earlier, gambling winnings in the UK are not subject to any taxes. This means that if whether you win £1 or £1,000,000 – all your winnings are yours to keep.
What's more, this no tax rule applies to all forms of gambling including; casino table games, sports betting, horse race betting and bingo
This wasn't always the case, however. After the UK betting industry first started to be regulated in 1960, there was a 9% duty applied to all winnings.
In 2001, Gordon Brown abolished this tax and instead decided it would be fairer for players to put a 15% tax on bookmakers and casino operators. This gambling tax is still applied to all earnings that an online or offline casino makes.
High rollers and professional casino players should also be happy to learn that the UK tax department, HMRC, do not make a distinction between those who play casino games for fun and those who play to win big. This is because gambling isn't a recognised trade within the UK.
This means that even if you play games of skill, such as poker, in competitions, your winnings are still yours to keep.
Professional gamblers should, however, always remember that there are a few extra points to consider. For instance, if you play casino games professionally outside of Britain, you may have to deal with taxes.
Moreover, if you are sponsored by a brand or being paid for public appearances, then you could be subject to income taxes on those events.
Gambling Holiday Taxes and Offshore Casino Sites
All of the tax rules we've mentioned so far are related to those who are playing and residing in the UK.
However, there are certain circumstances where different local taxes may be applied, namely, if you visit a casino in another country or if you play at an offshore online casino.
Gambling On Holiday
If you're considering travelling abroad to play at casinos, then the good news is that the UK has various tax treaties with different countries. This means that UK players are still tax-exempt on gambling winnings.
That being said, each different country will have a different process for receiving your winnings tax-free, so it's important you do your research beforehand.
In the US, for example, gambling winnings are taxable. This means that the casino can withhold up to 30% of your winnings if you fail to prove you're tax exempt. The legislation surrounding gambling in many countries is forever changing, therefore we'd recommend checking out your facts before you go abroad.
What's more, remember that you will always need valid proof of ID and many countries won't accept anything but a passport.
Offshore Online Casinos
Online casino gamblers shouldn't worry too much about being taxed on their winnings. This is because the UK now requires that all sites which welcome UK players hold a United Kingdom Gambling Commission license, whether they are based in the UK or abroad.
As such, these sites now pay their own gambling taxes to the UK government and their UK players remain tax exempt.
Keeping Gambling Records
Although, as a UK gambler, you don't need to declare any gambling winnings on your tax return, it's always wise to keep a record of your activity.
This is because huge money deposits into bank accounts, or a new flashy lifestyle, can sometimes be seen as a red flag. Having a record of your winnings serves as proof that you're not engaging in an underhand activity or hiding income from taxable sources.
Moreover, keeping a record of your gambling wins and losses helps you to budget better in the future. Without a record, you may have no idea how much you actually spend, and win, whilst gambling.
Whilst gambling winnings aren't directly taxable in the UK, there are some specific taxes which may affect you if you win big.
For instance, inheritance tax will be applied to any winnings you leave after you die. The threshold for this tax is £325,00 and anything above this will be taxed at 40%.
In addition, even gifts are subject to tax. This means if you want to share the wealth from your gambling winnings, you may need to think carefully about how you do so. You can gift up to £3,000 each year to one person tax-free, however, things get a little more complicated should you go above this limit.
Essentially, if you win big when gambling you should seek the help of a financial advisor. They can help you manage your money effectively and let you know which taxes you may be due to pay.