In short for the customer there is no tax to pay on either bets or any subsequent winnings in the UK. If you are not based in the UK you may be liable for tax in your own jurisdiction if you take any winnings back to that teritory, you are advised to check in advance.

It may seem strange to some people that the UK Government don’t want a slice of the pie from punters. Don't worry the government still get their two pound of flesh they just now take it direct from bookies in the form of point of consumption tax. Tax laws were changed in 2001, again in 2014 and then 2018 to reflect the changing nature of gambling moving progressively from the high street to online. These new laws removed the need for the bettor to directly pay a levy, this was instead shifted to the bookmaker in a move designed by the government to increase tax revenue from online operators based off shore.

List of information about Gambling duties. Help us improve GOV.UK. To help us improve GOV.UK, we’d like to know more about your visit today. Fortunately for professional gamblers, the tax authority in the UK (the HMRC) does not officially recognise ‘professional gambling’ as a taxable trade – meaning that their winnings are tax-free just like the winnings of any other player. HMRC have this to say on the matter.

Beware however, there are some instances in which tax may need to paid, such as in the case of index and financial betting. In this article we tell you everything you need to know about betting tax, we tell you if you need to declare winnings, what to do if you’re a professional gambler, the old rules, history and more.

• Tax:

What was the old Gambling Tax Law?

Prior to the 1960 Betting and Gaming Act it was illegal to place cash bets away from licenced race courses and tracks. The 1892 Gaming Act created the Totalisator board, commonly known as the Tote, set up to accept wagers at race courses and greyhound tracks from punters. It was however illegal to take bets off site unless these were made by post or over the phone.

Many illegal bookmakers operated throughout these periods and the large betting black market that ensued showed the government there was a huge demand for off site bookmaking, and crucially this could be taxed. This led to the 1960 Act that principally regulated and licenced high street betting shops.

The first shops opened in 1961 but under the condition that a new levy was to be charged at 6.75% to bookmakers. Bookies passed this on to punters in the form of a 9% betting tax. The tax could either be paid at the time of placing a bet or on the winnings instead. A levy of 9% on winnings can be a lot of money so most people elected to pay the tax on the stake.

What is the current Gambling Tax Law?

By the time of the new millennium the betting landscape was changing with more and more gambling moving towards telephone betting and betting online. This allowed companies to move offshore to tax havens such as Gibraltar, Malta, The Caymans, etc., from where they could allow punters to bet tax free. The earliest and most famous of these migration was the bookmaker named after Victor Chandler, now known as BetVictor. Victor moved his operation to Gibraltar in 1998 and this was said to be the final straw for the then Chancellor Gordon Brown who legislated a change to the gambling tax law.

In 2001 the betting levy was abolished and replaced instead by a 15% tax on bookmakers gross profits in the UK at point of supply. This was a landmark day for punters in Great Britain who could now bet tax free win or lose. However, when you think about it, bookmakers are businesses and therefore you are still paying the tax today, only now it is indirectly passed on to customers in the form of poorer odds and bigger operator margins.

Unfortunately however this new legislation didn't solve the ultimate problem, as more and more betting companies moved their online operations offshore. The tax at the time was 'point of supply' meaning offshore gambling brands were charged tax based on where they were based, meaning they would pay the local tax rate on profits instead of full UK tax. In Gibraltar for example this was capped at 1% or a maximum of £400k.

This didn't just result in the online-only operators to moving abroad it also caused the bigger, older, high street names, such as Coral, to move their online operators abroad too. Effectively keeping the high street business in the UK, with profits liable to UK tax, but moving all of the online profits abroad. As the online industry steadily grew over the subsequent decade this problem became more and more visible to the treasury.

In 2014 an amendment to the 2005 Gambling Act the tax legislation was issues. This contained a new 15% point of consumption tax on all gross profits. This now meant off shore companies were obliged to pay tax on profits earned from UK based customers to the UK treasury. Failure to do so would mean the betting company would not be re-issued with, or could not obtain, a UK gambling licence. As it is a legal requirement to have a licence to offer gambling services in the UK this also means it is a leagal requirement for all operators to pay the tax.

New 21% Point Of Consumption Tax For Remote Gambling in 2019

The UK chancellor, Philip Hammond, announced in his budget in 2018 that the a higher rate 21% point of consumption tax will now be imposed for online gambling on 'games of chance', up from 15%. This means if you play casino games, slots, table games like blackjack, poker, virtual or any other fixed odds game of chance, there will now be a 6% higher tax on the profits made by a casino site operating in the UK.

This will come into effect on the 1st October 2019, at the same time the new £2 limit on FOBT's will come in for high street shops. The main effect customers will notice will be poorer odds and return to player amounts as online gambling companies will largely pass on these costs to the customer. The competitiveness and profitability of the industry however should at least mean some of these costs are borne by the gaming companies at least. We may notice, in combination with Brexit, that more companies may leave the UK market in light of this new higher tax. We will update this section as more information is announced.

Gambling Tax FAQ's

Do Professional Gamblers Pay Tax?

Professional gamblers, or those who live off the proceeds of fixed odds gambling, do not need to pay tax whatsoever on their winnings. Conversely however you of course cannot get a tax refund on your loses either.

If you are a resident in another country, other than the UK, you may be liable to pay tax on your winnings. This could be the case if you either declare tax in another country or you try to take the money back into another territory. Check your local betting tax laws if you are unsure of the gambling tax where you are based.

I'm a visitor to the UK do I have to pay gambling tax?

You do not need to pay a penny to the UK government but depending on the laws in your country you may be liable to declare any winnings.

Beware however should your winnings be in physical cash and you are travelling outside of the EU you are restricted to taking a maximum of €10,000 (or equivalent) in cash out of the country at any one time.

Do I pay tax on Spread Betting?

Spread betting, index betting and binary options are not regulated by the UK Gambling Commission but instead fall under the umbrella of the Financial Conduct Authority (FCA). Despite this you do not need to pay the 18% UK Capital Gains Tax or stamp duty on winnings from Spread Betting. You also do not need to pay tax when betting on fixed odds currency and market fluctuations with bookmakers.

If however you call spread betting your primary source of income, or your day job, you may be liable to pay the tax, effectively you become classed as a trader in this scenario. You would on the other hand be able to write any loses off against tax.

If you trade on the stock markets this is a different story. This form of trading is liable to full capital gains tax and stamp duty.

Do you need to declare winnings to the government?

The short answer is no, your winnings are not taxable so you do not need to declare them. Likewise you won't get any rebate against your loses either so no point in declaring them either.

If you have won a lot of money it helps to declare to the treasury on your tax return. There is a specific box where you can enter gambling winnings. You won't be taxed and this could help in any future investigations if you are audited.

It certainly helps to keep records and receipts of your winnings as proof of how you obtained the cash. Often high value purchases require a fraud check and if you have no proof of where your money came from it can land you in hot water. Even if you want to make a large purchase in cash (a car, a house, etc), then you will need to show where the money came from. Yet another reason to only bet with UK licenced reputable, tax paying, bookmakers.

Can I give or gift my gambling winnings away?

Yes, and No. If someone inherits your winnings they will be liable to inheritance tax If your estate is large enough. You can give your money away to people or charities but this may be liable to inheritance tax should you die within 7 years of the gift. You can give a £3000 tax free each year to any one person or you can give £250 away in a gift to anyone you like so long as one person is not gifted more than £250.

Should you give more than this away and you die within 7 years you will be liable for a percentage of the tax, this is known as the tapor rule. If you live longer than this this is now exempt from inheritance tax.

Do I need to pay gambling tax in other countries?

If you win in a country that taxes gambling profits then you will pay the tax at the point of supply, and so you don't need to declare it. If you want to bring winnings back into the UK (or any cash for that matter) you may be restricted on the amount of cash you can bring in, if travelling from outside the EU, to €10,00 Euros (or equivalent currency value).

It is currently not known how Brexit will effect the ability to bring in gambling winnings from other EU country's. For more about betting abroad see our dedicated page.

History of Gambling and Betting Taxes

Gambling and betting was not taxed effectively in the UK for most of history. Unlicensed gambling was causing such a legal and moral problem to the Victorians that the parliament of the time issued the Gaming Act of 1845. This made a wager unenforceable by law and therefore rendered all contracts between bettor and bookie invalid. This didn't stop gambling but it certainly made it into an underworld practice.

In the late 1800's gambling was finally allowed, but only from the government run Totalisator Board (Tote) at select tracks and courses. The tote could conveniently set odds and pump profits back into the Treasury.

Over time some one-off exceptions emerged such as the Football Pools. This was a betting phenomenon and for most people in the UK the only experience of gambling they had. Despite legal battles with the football league and sneering from the government the pools were classed as a low wager competition and was allowed.

By the late 1950's black market betting was rife and the government had neither the resources or the motivation to stop it. In an 'if you can't beat em' join em' approach the government licenced off site betting shops under the 1960 Acts and the betting levy at the same time that remained in place until 2001.

Tips for Claiming Tax Back from US Casino Winnings

You won big in Las Vegas, Atlantic City, Reno, or one of the other gaming destinations in the U.S. Once you win a jackpot, you’re faced with a very unpleasant revelation: you are immediately taxed on your winnings. However, Refund Management Services advises that there is a way to get all or a portion of your taxes back from the IRS.

Gambling Tax Uk Winnings Tax

You can win a lot of money gambling in the United States. Of course, that means you’re also subjected to a casino winnings tax.

If you’ve made a trip to the U.S. and your gaming winnings are high enough or you win a prize and take the cash equivalent, the IRS will deduct 30% off of your winnings. Nobody wants Uncle Sam to withhold their winnings.

Still, there’s no reason to avoid the gaming tournaments or slots when you’re south of the border. Here is what you need to know about before you travel to the US to gamble and how to claim and get tax back from us casino winnings.

• Once your US casino winnings pass a certain threshold (which differs by casino, but is often $1,199) you will be subject to withholding tax. When this happens, you will be issued a W2-G or 1042-S slip.
• Don’t wait more than three years to claim gaming winnings on a tax return; that said, if you’ve won in the current year, we will be filing a claim at the beginning of the next calendar year. Most of our customers typically contact us within a few days of returning to Canada or their country of origin, so we can begin preparing the paperwork for them to get the refund that is rightfully theirs. If you delay submitting your claim, you won’t be entitled to a refund after 3 years.
• Keep track of all your US wins and losses every time you go, reporting your losses will maximize your return.
• It’s not just US casino winnings that are taxed, other gaming activities can be taxed like lotteries, raffles, and races.
• Remember that you can also claim taxed gaming winnings on a variety of games, such as lotteries, raffles, and horse races.
• When it comes to getting tax back from US casino winnings, you have a few options:

How To Get Tax Back From US Casino Winnings

Nearly four million gamblers win big in gambling cities across the U.S. and the IRS deducts taxes from all of them. However, as a non-resident of the U.S., there is a way to get your casino winnings back from the U.S. by hiring Refund Management Services to go through the process of obtaining a casino winning tax refund from the IRS. RMS is the easiest way to get your money back.

If you win $1,199.00 or more, contact Refund Management Services and we will obtain your taxed gaming winnings by filing a tax return. Take the stress out of the process by letting our trained experts handle it for you!

At the end of the day you have two options:

Option 1: Claim Tax Back from US Casino Winnings On Your Own

It is possible to file your own withholding tax return. While this may save you a small amount of money, it is only advised if you feel confident in your withholding tax filing skills. Much like your annual tax return, with so many opportunities to leave money on the table or make costly mistakes, claiming tax back from US casino winnings on your own can leave you in a costly position. Every year we deal with clients who have been denied their withholding tax refund by the IRS after filing independently. It is complicated, time consuming, and expensive to appeal this decision, so it’s often not worth the risk.

Option 2: Use a Withholding Tax Refund Professional

These folks make it their business to get your tax back from US casino winnings. Although there is a fee associated to using a withholding tax professional, they will ensure you don’t make any costly mistakes. To make sure you make the right choice, look for the following in your withholding tax professional:

1. Relationships with Casinos & Gaming establishments:

To start your claim process, you will need the IRS form 1042 from the casino you were playing in. If you misplaced it, that won’t be a problem for a reputable withholding tax refund professional since their relationship will allow them to easily recover it from the casino you were playing in. Even if you haven’t misplaced your form 1042, this is still a good quality to look for in your withholding tax refund professional.

2. Honest About Your Refund Timing

Although speed is of the essence when you’re looking to get your refund, due to the IRS wait times it is important to know that you’ll be waiting 6 months at a minimum but usually a full year before receiving your US casino winnings tax back. This is AFTER the claim is submitted. Any agency that tells you you could receive your US casino winnings tax back sooner is being misleading to get your business.

Gambling Winnings Tax Free Uk

3. Agent of the IRS

Agents of the IRS are people or companies that are allowed to certify your ID, a requirement when claiming tax back from US casino winnings. This means one less chore for you when making your claim.

4. Excellent Track Record For Claim Approvals

Gambling Tax Uk Winnings 2019

The firm you use to claim tax back from your US casino winnings should boast at least a near perfect record when it comes to rightful claim approvals.

Gambling Tax Uk Winnings Money

5. Owned and Operated by a Canadian Chartered Accountant

When claiming your tax back from US casino winnings, ensure the withholding tax specialist is a Canadian chartered accountant. This ensures your return is being handled by people with the appropriate expertise to be handling taxes. It will also provide you with insurance that your sensitive information will be handled professionally.

Gambling Winnings Tax Rate Uk

6. A Withholding Tax Industry Veteran

We are the longest standing withholding tax agency in the industry for a reason. Avoid leaving your refund in the hands of someone less experienced by choosing a withholding tax specialist who is tried, tested, and true.

7. Makes Casino Winnings Tax Refunds Easy

If you find you’re filling out multiple forms, your withholding tax professional is not earning their fee. The point to using a service when getting tax back from casino winnings is that they do all the leg work and make sure it’s done right.

RMS is the leading provider of withholding tax services for non-US residents. Learn why RMS is the right choice for claiming tax back from your US casino winnings and apply now for free.