One of the perks of playing online bingo or casino games in the UK is that occasionally you may pick up a jackpot or two, and in some cases those figures can be truly life-changing. But do you have to pay tax on such winnings?
It can be depressing enough opening up your pay slip to see what the tax man has got you for, so it would certainly put a damper on the elation of winning a big bingo jackpot or a payout on a progressive slot.
So, what are the rules when it comes to winnings being taxable?
Are Gambling Winnings Taxable?
The short answer is no. Any winnings you make through gambling are completely tax-free. This is the same across bingo, casino, lotteries and competitions. Often on television competitions on shows like Good Morning Britain or Ant & Dec’s Saturday Night Takeaway you’ll see cash prizes referred to as tax-free, and that’s the case, whether you win £50 or £500,000. No matter what the sum of the prize, you won’t have to pay tax on it.
This is also the case when playing abroad as a Brit. In some nations you’ll find taxes on winnings, including the likes of France and Spain, while in Holland you’ll find around a 30% tax on any winnings over $454 when it comes to the lottery. However, Britain has a deal in place with many countries to ensure British wins remain tax-free.
The reason for the lack of tax on gambling winnings is generally just down to ease. If people were required to pay tax on their winnings, then just like businesses can they’d also be able to offset losses. And when it comes to gambling it’s fair to say people often lose more than they win, which would make it more complex than it’s really worth.
Do I need to declare gambling winnings?
Gambling winnings in the United Kingdom are not subject to tax. This includes money won at casinos, bingo halls, racetracks, and online gambling sites. There is no limit to the amount of gambling winnings that can be tax-free in the UK.
However, it is important to remember that any gambling losses cannot be offset against winnings for tax purposes. So, if you have a particularly unlucky day at the casino, you will not be able to deduct your losses from your winnings when filing your taxes.
It is also important to note that while gambling winnings are not subject to tax, they may still be considered income for other purposes. For example, if you receive child support or other government benefits, your gambling winnings could impact the amount of benefits you receive.
Do I have to pay tax on poker winnings UK?
There is no definitive answer to this question as it depends on individual circumstances. It is advisable to speak to an accountant or tax specialist to get accurate advice.
Poker winnings are considered taxable income in the UK. However, there may be some exceptions depending on how much you win and whether or not you are considered a professional gambler.
If you only play poker occasionally and your winnings are not considered significant, then it is unlikely that you will be required to pay tax on them. However, if you make a living from playing poker or regularly win large sums of money, then it is more likely that you will be liable for tax on your winnings.
When gambling, it is always important to be aware of the tax implications and seek professional advice if necessary. This will ensure that you comply with the law and do not end up with a hefty bill down the line.
So Who Pays Tax Within Gambling?
Players will never have to pay tax on any gambling winnings, but where tax comes into play, and quite heavy taxation we may add, is with the gambling companies. There are a large range of gambling taxes and duties to be paid, with each type of gaming having specific duties to them, such as:
- Bingo Duty
- Gaming Duty
- Lottery Duty
- Machine Games Duty
These are all clearly labelled on the HMRC website and highlight just how much online casinos like Casino777 have to pay. In most cases, duty is paid on all profits made by gambling companies and the rate that needs to be paid can be anywhere from around 15% to 50% dependent on revenue and profits.
Other Tax on Gambling Winnings
Where tax may come into play with your winnings is further down the line. If you’ve won a substantial amount this will particularly be the case. If you’re wanting to invest those winnings, then you’ll be charged on any income through a capital gains tax, while also you need to think ahead when leaving your fortune behind.
Inheritance tax will be applied to gambling winnings in the unfortunate event of loss of life, so if your entire estate is worth more than £325,000 then you’ll be subject to a 40% tax. It is possible to get around this, with things like being able to give away £3,000 per year to any one person tax-free.
However, this is a completely different issue, with plenty of guides available online that can help you out on this matter further.
Ultimately though, when it comes to tax on winnings, there’s no immediate need to worry. Enjoy them. After all, that’s what they’re there for.