Fuzzable
Although it might not happen very often, there are occasions when gamblers, whether it’s on sportsbook betting or a flutter on the roulette wheel, win big amounts from the bookmakers or casinos.
If you’re fortunate enough to be on the receiving end of a massive gambling win, you might be concerned that you’ll lose some of your winnings to the government in the form of a gambling tax. You have nothing to fear though, as we’ll talk you through the relevant gambling laws around winnings, meaning you can continue to win big at https://casino.betfair.com/c/roulette.
The history of UK tax laws
When betting shops were first legalised in the United Kingdom as a result of the Betting and Gaming Act 1960, there was a tax on any winnings punters made. Back when the act was introduced, there was initially a 9% tax applied to gambling winnings, meaning that for every £100 won, £9 was paid in tax.
Over the following decades this was reduced to 6.75% before the biggest change was announced by the Labour governments in March 2001.
Abolishing the tax
In Gordon Brown’s March budget in 2001, he announced that the government would abolish the tax on gambling winnings. Although it didn’t come into effect until 1st January 2002, it was still welcomed, particularly by punters.
The decision to abolish the tax was made because Gordon Brown, who was the Chancellor of the Exchequer at the time, was concerned that the UK might lose revenue and jobs because it was damaging the number of people gambling.
As a result of the abolition of the tax, the UK experienced higher levels of gambling than previously and this move has been credited, in part at least, for the huge growth of the UK gambling industry. But what were the UK going to do about the loss of potential income that such a tax created?
Taxing the operators
Instead of taxing the people who win from gambling, the government instead applied a 15% levy to the gross profits of all bookmakers. Although this was a good idea in theory, a problem soon arose – some gambling companies moved base to countries with a lower rate of tax being applied to their profits. Places like the Isle of Man, Gibraltar, and Malta were popular with those who moved, but just over a decade later, the Conservative and Liberal Democrat coalition government found the answer to this.
In 2014, the Point of Consumption Tax was introduced, and it meant that gambling operators could no longer avoid paying tax to the UK coffers if the end-user was playing in the UK. What that meant was that regardless of where the company is based – whether it’s any of the above or even Antarctica – so long as the end-user is playing in the UK and the online casino is making a profit, they are liable to pay tax to the UK.
Result?
It’s a great result for gamblers as they can keep the winnings they’ve made. If you’re worried about being taxed if you become a professional gambler, then fear not, because Her Majesty’s Revenue and Customs (HMRC) does not recognise professional gambling as a taxable trade and you will therefore not be taxed.
