Gambling Taxation Uk

 
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onlinecasinoselite.org › Blog › UK gambling Taxation System Explained

It’s difficult to do anything in life without having to pay the government in the form of tax. So surely the gambling industry is no exception?

Totaling a taxpayer's Forms W-2G, Certain Gambling Winnings, for the year would seem to be the straightforward way to determine the amount of gambling winnings to report on a tax return. Forms W - 2G, however, do not necessarily capture all of a taxpayer's gambling winnings and losses for the year.

If you expect you need to declare your gambling winnings to the government, you might be in for a surprise.

The gambling tax explained

  1. Gambling enterprises are required to pay the UK government a minimum of 15% tax on any amount up to £2,370,500. The tax then increases accordingly to 20%, 30%, 40% and 50%.
  2. Is Gambling Taxable In The UK? No, gambling is tax free in the UK. While players in some countries such as the USA, France, and Macau have to deal with gambling taxes between 1% and 25%, bettors in the United Kingdom have the privilege of keeping the entirety of their winnings.
Gambling taxation uk government

To compensate for this the UK Government chose to increase the 15% tax rate to a whopping 21%. Despite the increase, crucially, this has no real impact on us as punters. To go back to the very simple answer as the beginning of this piece – gambling profits and stakes in the UK are still totally tax free. 'UK plc wins because we have a real opportunity to be the world's leaders in on-line betting and turn the bookmaking industry into a big earner of foreign currency. 'The international potential is.

The UK gambling tax system is very advantageous to players. Not only does it work out in your favour, but it is also incredibly easy to understand.

Whenever you gamble in the UK, you are not required to pay any tax whatsoever. You don’t have to pay tax on your winnings and there’s also no need to pay any tax on your initial stake either.

This, of course, means you don’t need to report your winnings to the taxman. If you win £5,000 at an online casino, you get to keep that amount in full! This is a great improvement on the policies of other countries where you don’t actually get to keep all of your winnings.

Who gets taxed?

So how is this all possible? The gambling industry is worth a lot of money, so why is the government not taxing it?

Instead of taxing the players, the UK government actually taxes the operators. But this wasn’t always the case. In the past, you used to pay a tax to the government either as a tax on your stake or as a tax on your winnings. What changed then?

In 2002, the UK government was concerned the British gambling industry wasn’t going to be able to compete with the rise of online gambling sites in UK. This led the government to .

As we can see today, the decision was a successful one. The UK gambling industry is still alive and well to this day.

What about professional gamblers?

Professional gamblers might actually have one of the only professions that are not actually taxed in the UK. If you are lucky enough to gamble for a living, you don’t need to pay the tax man a penny on your gambling winnings.

The reasoning for this is fairly simple. If the government was allowed to tax you for doing a certain activity such as gambling, under the current tax system, you would have the ability to claim money back from the government for your losses.

The UK government does not want to open the floodgates for everyone who loses money gambling to claim money back. Not only does this mean professional gamblers won’t ever be taxed, but it also means the gambling tax is unlikely to return any time soon.

How did operators react?

It’s no surprise that casino operators were not too thrilled about this new taxation system. Operators looked for a way to pay as little tax as possible.

Some of them starting running their businesses out of “tax haven” countries. These countries require casino companies to only pay a very small amount of tax compared to the UK. This is a big reason you will see certain countries such as Malta coming up over and over again in the gambling industry; they offer very favourable tax rates to casino operators.

Gambling Tax Uk 2019

Unfortunately for the operators, the UK government took a stand against this practice. They introduced the Point of Consumption Tax (POCT).

According to this tax, a casino company must pay the tax according to the country their players are living in. This means that if a UK player accesses a casino site from the UK, the operator will need to pay the UK tax on their player’s activities.

Enjoy tax-free gambling

The tax system for players in the UK is elegantly simple. You don’t pay any tax whatsoever on any kind of gambling transaction. It’s the operators who have to worry about navigating the UK tax system, not the players.


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