Are you inquisitive to know about the taxation policy of the UK when it comes to gambling and online betting? Well, United Kingdom is one of such countries in the world which does not levy any tax deductions for online casinos, gambling websites, or betting sites. There has been a long story on the standard operating procedures relating to taxation policies for gambling winnings in the UK.
What is the means for the Punters and Online Gamblers in the UK?
Well pretty much as discussed above, the entire chunk of money circulated on won by any punter or gambler in a betting table, online or offline casinos throughout the UK is completely Tax-Free. This does imply that; they are not liable to pay any taxes to the UK Government of Tax Authorities whatsoever.
When you book your winnings and send the winning amount to your bank account, the entire process is tax-free and does have any standard deductions before the transfer. However, you could still be liable for paying tax in other forms such as Gift Tax, Inheritance tax, etc. Also, you could get a tax demand in case your earnings are huge and the amount incurs interest in your bank account which is substantial. The interest money from your gambling winnings at this point is clearly taxable.
Also, any transactions done in the UK with brokers or gambling sites registered outside the UK are not under the jurisdiction of the Government of the United Kingdom. In such cases, according to online casino FUN88, the respective taxation rules of the registered countries will apply to the tax calculation and payment as well. So please make sure to consult your gambling site owners to understand the rules and regulations for your taxation accordingly.
Evolution and time tracking of Gambling Taxation Rules in the UK- the 1960s to 2001
It dates back to 2 decades around 2001 when betting duty and taxation rules were modified for the United Kingdom. During 2001 and since last 50 years from the mid-1960s, UK Government used to levy 6.7% betting duty charges for all the casino and gambling operators across the UK. During those days, gambling was mainly an offline business conducted at casinos extensively.
These betting duty charges were amplified by the casinos and the punters/gamblers had to pay a hefty 9% of gambling winnings to the casino owners, either through a flat deduction from their winning amount or through tax payment channels.
What happened after 2001?
In the year 2001, a new set of taxation rules were brought over by the UK government in a jiffy, to control the overwhelming and viral expansion of the UK Bookies, Betting sites, Casinos, and the entire system gradually converting their offline system to online modes.
As per the new taxation policy, UK Bookies had to pay a hefty 15% tax or more based on their origin of business and geographical location across the UK. This was considered as the Point of Supply Tax. However, the same rules were not applied to the local casino operators and gambling site owners offering services to the Gamblers and Punters in the UK.
Consequently, this created a huge disparity in the Gambling system, and the UK bookies offering online services started to shift their bases outside UK to other countries with lower tax demands.
How UK Gambling Taxation Rules got changed in 2014?
Over the time of a decade almost, the UK Government realized that the betting and gambling taxation revenues for the country had significantly declined and the gambling money was being moved out of UK substantially. Hence an amendment was done to the 2005 UK Gambling Act to replace the Point of Supply taxation policy with a new Point of consumption taxation policy, evenly applicable across all bookies, casinos, and gambling operators in the entire UK.
Key Points to Asses for Punters and Online Gamblers in the UK
- The winning prize money on account of an online gambling or betting site or contest is not subject to a compulsory declaration or disclosure to the Government as such.
- Intrinsic taxation rules such as Gift tax, inheritance tax, or interest on high-value earnings continue to be a place and are equally for online or gambling prize money.
- Tax deduction at Source is not conducted on any value of gambling winning in the UK by any casino or gambling operators be it online or physical offline operators.
- Even if you are in the UK and using casino operators online that are registered outside the UK, you could end up paying taxes that are completely based on the guidelines of the respective countries where the activities of the bookies or casino operators take place.
What could be the Tax Situation on Gambling Winning in the next decade?
UK Government is already banking upon huge taxation revenues from online bookies and casino operators using the Point of consumption policy. There has been a steady rise of the UK Tax revenues from 1.51 Billion GBP to almost a double of 3.02 Billion GBP over the last 20 years. So the revenue just keeps on growing year on year with newer players entering the gambling markets in the UK.
So as a final verdict, it is highly unlikely at this point of time to expect a change in the rules and regulations of Gambling Taxation in the United Kingdom which is already in the best interest of all.
However, the world has been disruptive since the last decade with major developments and the Corona Virus pandemic hitting hard in the UK and European countries as well. So the next 2 to 3 years will be a determining factor for any changes to taxation policy on Gambling winnings in the UK.
