Am I Expected to Pay Tax on my Casino Winnings in the UK?

Share on facebook
Share on twitter
Share on linkedin

The United Kingdom is the perfect place to live in irrespective of whether you’re a casual gambler who visits casinos once a month or a professional that lays down multiple wagers every single day. Not only are most forms of gambling entirely legal and regulated, but winners get to keep everything they’ve won as well. This holds true for Scotland, England, Wales and Northern Ireland too. 

Why wouldn’t the HM Revenue and Customs department not tax gambling winnings and make millions? Well, that’s because they already tax gambling operators a pretty significant percentage and are already raising sufficient revenue for the state in this way. 

However, there are some nuances that one needs to wrap their head around when it comes to the taxation of gambling winnings in the UK. Here’s everything you need to know about how UK gambling tax laws work in practice. 

If You’re a Gambler Based in the UK…

In the UK, there is no tax on gambling. In contrast to certain nations, such the US, France, and Macau, where gambling taxes may range from 1% to 25%, punters in the UK have the luxury of retaining all of their gambling proceeds. In reality, there are no taxes for gamblers in this jurisdiction, whether they play online or offline. 

If you’ve been gambling in here for quite some time, you might remember having to deal with gambling taxes in the past. However, Gordon Brown, the Chancellor of the Exchequer at the time, eliminated gambling winnings tax in 2001. 

Due to the surge in offshore betting operators that served the UK, the government was forced to expedite legislation changes so that players would have no incentive in playing at unregulated, offshore online gambling portals. The abolishment of taxes on winnings was one of the changes as part of this initiative.

The UK Government Still Makes Billions in Gambling Tax Revenue

As we’ve mentioned, players aren’t subjected to tax, but UK-based gambling operators don’t enjoy the same privileges. The HM Revenue and Customs declared having roped in a mind boggling £2.9 billion in just 2017-18. 

This money comes from various gambling channels including lotteries, sports betting, online gambling, land-based casinos, and such. 

A sizeable amount of income comes from the 15% tax surcharge that gambling companies are required to pay. Although the individual gambler is exempt from paying taxes regardless of their winning or losing streak, the government does tax the revenue from casinos, poker rooms, betting shops, and other similar businesses. 

These costs are included in the odds in a variety of ways even if players do not directly pay them. However, as a gambler, it’s certainly better to just focus on enjoying your games and wagers rather than being faced with never-ending tax-related paperwork. 

Operators that Serve UK Clients will Pay Tax No Matter Where in the World They are Based

Many of the websites that are active in the UK are situated abroad. Some of these offshore businesses were initially situated in Britain, but they soon realized that by moving their servers overseas and incorporating in a tax-free country, they could lower their tax obligations.

The UK Gambling Commission now mandates that all websites that accept British clients have a complete license, whether they are physically headquartered in Britain or somewhere else, in order to combat operators moving base to avoid taxes. These websites are additionally subject to the same 15% tax as their British-based competitors. 

What About Professional Gamblers? Do They Have to Pay Tax on their Gambling Earnings?

The tax authority, HM Revenue & Customs, does not distinguish between amateur and professional players. Even if this may change in the future, gambling is not now a recognized trade.

So, it does not matter whether you’re a professional gambler or a rookie. If you’re a player based in the UK, the good news is, your winnings won’t be taxable. So, you can put your mind at rest whatever you may accumulate in winnings from your no deposit bonus will be entirely yours once you fulfill the requirements to cash in on your bonus funds.

Bear in Mind: Income Earned via Gambling Winnings is Subject to Income Tax

Even if there are no gambling regulations that require you to pay taxes on your gains, you still need to be concerned. After all, more taxes could still be relevant.

Extra tax is a concern for many lottery winners, especially on the “larger” prizes. Any money you make from your victories might be taxed; for instance, money made through investments would be charged an 18% capital gains tax! Not only that, but after you pass away, your gains may also be subject to an inheritance tax.

The Bottom Line

If you reside in the UK, you may bet worry-free and tax-free thanks to the tax regulations. In general, it is unlikely that this will change anytime in the future—taxing gambling earnings in the UK would never be practical. For instance, if you tax an activity’s revenue or profit, you must also deduct any losses that are attributable to that activity. So, unlike players in many other parts of the world, UK gamblers definitely have the edge. 



Rishikesh Y Dube, 22 years old I am a fourth-year BLS LLB student apart from law school and my love for human behavior and phycology/criminology, I love to cook watch anime, and practice Mixed martial arts. I am a person who is keen to know and gain knowledge about everything on which I can put my hands on. I am also an IAS aspirant and thus interested in politics and all the sociopolitical and economical issues.

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts