- Gambling Tax Uk 2019 2020
- Gambling Tax Uk 2019 Date
- Gambling Tax Uk 2019 Schedule
- Gambling Tax Uk 2019 Results
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.
- UKGC Reports a Decline in Youth Gambling Participation for 2019. Research company Ipsos MORI conducted a survey on behalf of the UKGC that took place from February 2019 to June 2019. The survey involved 2,943 participants aged 11 to 16 from 124 educational institutions in the United Kingdom.
- Tax Deduction on Illegal Gambling. Tax is deducted from returns earned from illegal gambling. According to the AGA, the association responsible for nipping illicit gambling activities and businesses in the bud more than $150 billion is spent by Americans on illegal sports betting.
Gambling Tax Uk 2019 2020
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.
These non-cash gambling winnings are taxed depending on their fair market value. Fortunately, gambling taxes are not progressive like income taxes. Whether you win $500,000 at the poker table or $1,300 at the slot machine, the tax rate (25%) remains the same. In most cases, the casino deducts 25% of the full amount you won before paying you. The UK gambling industry's gross gambling yield, or GGY, for the 2017/2018 was roughly £14bn. The tax on gambling establishments is now set at a minimum of 15% up £2,370,500.
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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.
British punters will be ‘driven away to the black market' if certain restrictions proposed by the Gambling Commission are implemented. That is the stark warning from Brigid Simmonds, Chair of the country's Betting & Gaming Council, the single association that represents betting shops, online gaming businesses and casinos.
The Gambling Commission is carrying out a consultation that has raised the possibility that overall monthly online gambling losses might be capped at £100 unless customers could prove they could afford to lose more. The findings are likely to influence the Gambling Act Review, which last week started a 16-week call-for-evidence period.
Talking on Racing TV's Luck on Sunday show, Simmonds said that requests for certain personal information to prove you have the means to bet is not the right approach.
'This issue of affordability is really important,' she said. 'If people are asked to provide tax returns, as somebody suggested, people will start walking away. I mean, I wouldn't share my tax return with anybody. We will be driving people to a black market. PWC [PricewaterhouseCoopers] reported that 200,000 UK gamblers took part in black market activities in 2019. They have made it too tight. The Gambling Commission has asked for more resources to deal with the black market, but that is difficult to do in the internet age.
'We will be doing what they've done in Sweden, where the numbers are up to about 40 percent of people [who do or would consider betting on unlicensed products], because they've been too tight [on restrictions].'
Simmonds has urged the racing industry to work closely with her members. Otherwise, she warned, racing's revenues would be impacted.
Gambling Tax Uk 2019 Date
'We need the horseracing industry to step up and be supportive because that £350 million a year that is currently going into racing via the betting industry is going to reduce if there are more restrictions,' she said.
'We have to make sure we're not intervening in the wrong way when 30 million people in this country part place in gambling activities on a regular basis without any problem at all.
'There is a holistic way of approaching this, which would be better than simply saying, ‘If you don't produce all of this information, you're not going to gamble at all.'
Finding a balance
'As an industry, we have to make sure that we are not preying on vulnerable people. During lockdown, we have increased the number of safer gambling messages by 150 percent – and without doubt there is more intervention we can do. But it doesn't have to be all about ‘You have to produce your bank statements'.
'There are lots of things individual operators are doing that could be done across the board, but we need to a find a balance between not driving people to the black market but also encouraging people to be responsible and have a better understanding about risk.
'We need the racing industry to support the betting and gaming industry and if they've got concerns to please bring them forward. We need to work in partnership to make sure that the product is safe and that safer gambling is at the heart of all our sponsorship agreements as it absolutely should be.'
Gambling Tax Uk 2019 Schedule
Simmonds insisted that betting companies had placed safer, responsible gambling at the top of their priority lists, and were doing their best to spread this message.
Gambling Tax Uk 2019 Results
'I'm sure when we do this review, there will be more restrictions put in place. And we need to do more. We have had to admit we've not been best in class in the past,' she admitted. 'I took five CEOs from betting companies to House of Lords Gambling Committee, and they were absolutely clear that safer gambling would be at the heart of everything they do, and that comes from boardroom downwards.'
She went on to say that it was essential everyone was armed with the facts when contributing to the discussions and call for evidence.
'We're keen for this to be balanced, proportionate, but above all, evidence-led,' she said. 'We need to be very careful not to have misinformation. I was listening to another channel where they said ‘Of course there has been a huge increase in advertising which has led to a huge increase in problem gambling' but there is no evidence that is the case.
'Problem gambling has been at around 0.5 percent for the last 20 years and, in advertising, the whistle-to-whistle ban [on televised football matches], that we introduced, reduced the exposure to young people on television by about 97 percent.'
