Gambling Winnings? Whether you decide to gamble a few pounds or if you are a world-famous poker player, the UK will be an excellent place for you. Did not? Because you don’t have to declare your earnings to the HM Revenue & Customs.
Online gambling is not only legal in the UK but fully regulated. What’s more, you don’t have to give a pound of your winnings to the state even if you win the lottery!
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Last updated: 27 September 2023
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Although it may seem hard to believe, all winnings from gambling in Scotland, Wales, Northern Ireland(Belfast), and England are completely tax-free, and you do not have to report them.
On the other hand, HM Revenue and Customs have no reason to grumble or complain as they get huge fees from online casinos, sports betting sites, bingo platforms, and poker networks.
This means that all players, winners, and losers, pay much more in taxes than people who don’t gamble at all!
Keep reading to learn all there is to know about the tax situation in the UK.
Online casinos are becoming more and more popular in this country. More and more players dare to play one or the other game after work and sometimes even make a profit. But if you were lucky, you are faced with the next question: Do casino winnings count as income? If so, how do they have to be taxed, and what should I consider when taxing them?
Do Casino Winnings Count As Income?
Basically, it looks like the Income Tax Act lists 7 types of income that are subject to taxation. This includes:
- Income from agriculture and forestry
- Business Income
- Dependent work
- Income from capital
- Rental and lease income
- Other income
A quick look at these types of income reveals that gambling winnings would normally fall into the “other income” category. But they aren’t! Accordingly, winnings from gambling, lotteries, and sports betting do not count as income.
What Are the Differences Between a Game of Skill & a Game of Chance?
Although players do not have to pay income tax on gambling winnings, it is important to distinguish between two types of gambling games – games of chance and skill games. Below, we explained the difference between the two types in more detail:
Games of Chance
In casino games, the chance of winning is largely due to chance. The player himself has very limited or no influence on the gameplay. Good examples are these games:
- Roulette: Roulette is like the lottery. The player cannot, in any way, an influence which number and color the ball will hit.
- Slot machines: Here, too, almost everything depends on chance, so a game of chance is also assumed here.
Games of Skill
Games of skill are different from games of chance. In the later type, the chance of winning depends to a large extent on the skill of the player. A typical example of this category is poker games. Winnings generated from poker games, therefore, count as income in many countries like Germany and must be taxed. Participation in quiz shows is also regarded as a game of skill, and the profits are subject to tax. However, in the UK, you can keep all your gambling winnings, no matter how large or regular.
Keep Records of Your Winnings / Losses
We’ve made it clear many times before that you don’t have to cut a penny out of your winnings and pay them to the UK government. However, often times many successful poker players, professional bettors, and tipsters prefer to keep personal records of their winnings and losses backed up by bank statements.
Although keeping a scorecard is quite a waste of time it can be a wise decision if you are playing in offshore casinos which have poor money laundering protection measures. Thus, banks can, at any moment, freeze your accounts and ask you about the source of these funds.
In this case, there is no way to justify the profits except through profit and loss statements and screenshots of the payment history in the non GamStop casinos in which you play.
If gambling is your only source of income, making a million dollars overnight can raise a lot of red flags. Having gambling records will be strong evidence that you are not hiding income from non-taxable sources.
Another benefit of keeping a scorecard is knowing the net worth of your profits after deducting your losses and other costs such as travel, meals, and accommodation.
Are Bingo Winnings Taxable?
The short answer is absolutely no!
Winnings from all forms of gambling, including bingo games, are not subject to tax, at least within the UK.
Your winnings will not be subject to any type of tax on any of your winnings or bets.
It doesn’t matter if you get £100 or £10m.
This applies to all forms of gambling, from slots to bingo, lottery, table and classic games, sports betting, and betting on virtual sports. Thus, if you win a lot, you can rest assured that you can keep the full value of your winnings.
However, there are some other deductions that you should keep in mind.
Your casino or bingo network may charge transaction fees, and your payment processor may place additional fees on your deposits or withdrawals.
It is also possible that your withdrawal will be released incrementally if you are lucky enough to get a big sum.
If you have won frequently at a casino or sports betting site, you should check the terms and conditions to ensure that you will be able to withdraw your winnings normally.
If you do not live in the UK, your earnings may be subject to tax, so it is important to check in advance. For example:
- France imposes a 2% tax on poker winnings.
- In Spain, gambling winnings are considered part of the income.
- The Netherlands imposes a tax of 29% if you win more than 454 euros in the lottery.
However, if you are a British citizen and find yourself gambling abroad, you generally don’t have to worry about taxes. Most countries have treaties with the UK, so you will not be subject to its tax requirements.