One question that confuses many of the larger gamblers who visit this site is the issue of whether they need to pay any tax on their winnings. This is a divisive issue, as big gamblers obviously don’t want to have to fork out money to the taxman when they win big, while opponents of gambling believe that gamblers should be taxed, so as to pay for the damage that gambling addiction can do and the treatment many people need to take to overcome the issue.
So Is Tax Payable On Gambling Winnings?
To answer this issue once and for all, we’ve taken a look at the rules and regulations regarding tax being paid on gambling winnings and think we’ve finally cracked it. It’s good news for the gamblers among you, as the answer we’ve come up with is that money won from gambling winnings – whether this is through mobile slots, mobile bingo, bookies or casinos – is not taxed and therefore you can keep every last penny of the winnings.
The logic behind this decision goes as such: the government does make money from gambling, but instead of taxing the players, they tax the gambling institutions instead. For example, a bookie on the High Street will pay about 15% of its gross profit to the taxman, while a casino might have to pay up to 50% of their gross profit. Other gambling institutions, such as lotteries and clubs, either pay VAT or pay a lump sum of money up front.
Why Don’t We Pay tax On Gambling Winnings?
So why are the gambling companies targeted and not the players? Well, the gambling industry is an important part of the economy. The taxes paid by the institutions are high and the jobs created by the gambling industry help to fuel the economy as well. Taxing the players would see gambling fall, therefore leading to a lack of revenue from the institutions and also to land-based gambling premises to shut down, costing a number of jobs per closure. Gambling is a big money-spinner for the government, so why change something that isn’t broken?
Are There Any Exceptions?
There is only one time when tax will need to be paid on gambling winnings, and it is not likely to affect 99% of people reading this article. This situation is when the gambler is a professional gambler – someone who gains the majority of their income through gambling. They should be declared as self-employed and therefore will pay tax in the same way as a self-employed plumber or electrician. Whether many professional gamblers actually pay this tax is another subject altogether…
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