Jan 01, 2012 Rates, allowances and duties have been updated for the tax year 2015 to 2016. Rates, allowances and duties have been updated for the tax year 2015 to 2016. Tax Obligations Outside Of The USA. The United States is a bit of an outlier when it comes to taxing gambling winnings. In the United Kingdom, the government taxes the gross profits of casino operators rather than players. Canadians can play the lottery, live casinos, poker and online games without paying taxes unless they are a professional. See full list on gov.uk.

• And while online gambling provides these casinos with a great opportunity to cross-promote their respective brands while offering services to a larger number of PA casino-goers, the jaw-dropping license fees, unprecedented level of control, and sky-high slot machine tax rates implemented by Pennsylvania lawmakers could pave the way for a failed business model that threatens future iGaming.
• No, gambling is tax free in the UK. While players in some countries such as the USA, France, and Macau have to deal with gambling taxes between 1% and 25%, bettors in the United Kingdom have the privilege of keeping the entirety of their winnings.

Whether you gamble no more than a few quid per year or are an internationally known poker player, the United Kingdom is a great place to call home. Not only is gambling completely legal and fully regulated in the UK, but you’ll be able to keep whatever you win. Although it might seem hard to fathom, gambling winnings are tax free for players in Scotland, Wales, Northern Ireland, and England. As you might expect, HM Revenue and Customs have no reason to cry poor, as they claim a sizable share by levying duties on gambling operators. Keep reading to learn all about the tax situation in Britain.

Is Gambling Taxable In The UK?

No, gambling is tax free in the UK. While players in some countries such as the USA, France, and Macau have to deal with gambling taxes between 1% and 25%, bettors in the United Kingdom have the privilege of keeping the entirety of their winnings. As a matter of fact, both online and offline gamblers in Britain don’t have to waste their time thinking about taxes. If you’ve been gambling for a while, you might recall dealing with betting duties years ago, except Gordon Brown, who was Chancellor of the Exchequer at the time, scrapped that tax in 2001. Thanks to the sudden rise and perceived threat of offshore betting earlier this century, the government was effectively forced to enact several changes. Yet this move was just one of many important developments. The government also passed the Gambling Act 2005, established the UK Gambling Commission, and started regulating online casinos.

If you live in England, Scotland, Wales, or Northern Ireland, your gambling winnings are tax free whether you play live or on the internet.

Did you know the UK government makes a virtual killing from gambling? In the 2017-18 fiscal year alone, Her Majesty’s Revenue and Customs raked in £2.9-billion in gaming-related duty. Although that figure includes lotteries, betting, and live as well as remote gaming, that’s an astronomical amount. A great deal of that revenue comes from the 15% tax levy gambling operators must pay. While you don’t have to worry about paying taxes when you win or lose, the government does tax betting shops, poker rooms, casinos, and other related establishments on their profits. Even though players don’t pay these fees directly, in many ways they are built into the odds. Nonetheless, it’s nice that you can concentrate on playing your favourite games instead of dealing with complicated tax forms.

• UK players do not pay taxes on their gambling winnings.
• The previous betting duty was abolished in 2001.
• Gambling sites now pay a 15% levy on their earnings.
• The government netted £2.9 billion in gambling duties during 2017/18.
• HMRC draws no distinction between pro and amateur players.
• If you gamble outside of Britain you may need to deal with foreign tax laws.
• The current tax code applies to online and offline betting.

Placing Your Bets Offshore

If you’ve gambled online, you’ve likely noticed that the industry continues to evolve. That’s true whether we are talking about the quality of the games, technological aspects like mobile betting, or regulatory and tax issues. As you might know, many of the sites that operate in the United Kingdom are based offshore. Some of these offshore operations were originally based in Britain, but quickly realised they could reduce their tax burden by locating their servers elsewhere and incorporating in a tax-free jurisdiction.

In order to counteract these moves, the UK Gambling Commission now requires all sites that welcome British customers to be fully licensed, whether they are physically based in Britain or elsewhere. In addition, these sites must also pay the same 15% tax as their British counterparts. Of course, as a player you won’t have to deal with these taxes. Nevertheless, a level playing field reduces the odds of the government making changes that negatively impact bettors.

Are Professional Gamblers Taxed On Their Winnings?

No - HM Revenue and Customs do not make a distinction between casual and professional players. Even if this may be subject to change in the future, at the present time gambling isn’t a recognised trade.

If you are a professional poker player, chances are you’ve already consulted with an accountant. Even so, there are a couple of points to consider. If you play outside of Britain, you may have to deal with local taxes. For example, if you win money in Las Vegas you could be subject to a federal withholding tax, although you can often apply for a refund as a non-resident. Also, if you become a poker celebrity and get paid for public appearances or representing an online cardroom, you could be subject to taxes but not on your winnings.

Keeping Records of Your Play

Although you don’t need to declare your gambling income on your tax return in the United Kingdom, successful poker players and other professional bettors often maintain personal records of their wins and losses. While this might seem like a waste of time since your winnings are tax free, there are a couple of benefits to keeping some sort of performance log.

It’s always smart to know how much you actually spend and win while gambling. Don’t you want to know how much profit you’ve made after you factor in your losses and other expenses like travel, meals, and lodging? If gambling is your sole source of income, you could end up raising several red flags if you drive to the shops in an Aston Martin. Having gambling records will be ample proof that you aren’t hiding income from taxable sources.

Frequently Asked Questions About Gambling Taxation in the UK

How much are gambling winnings taxed?

Gambling winnings are not currently taxed in the United Kingdom. Instead, casinos and other betting sites pay taxes on their profits. Remote gaming operators currently pay a 15% duty. Unless you plan on operating a casino, this will be of little concern to you.

Is gambling income taxable?

If you are a resident of the United Kingdom, your gambling income won’t be taxed. Unlike other countries such as the USA, you’ll be free to keep whatever you win in Britain even if you are a professional poker player. At the same time, you can’t deduct any losses you might accrue.

How much money do you have to win at a casino to pay taxes?

It doesn’t matter if you win £20 playing fruit machines or £2-million in a poker tournament. Your winnings will be tax free if you live in Britain.

Are blackjack winnings taxed?

No - If you live in the United Kingdom, you won’t need to pay taxes on any money you win playing blackjack.

Are gambling winnings taxed in Scotland?

No - Scottish players can win big without worry about taxes. If you live or gamble in Scotland, you can keep whatever you win.

Will my winnings be taxed if I live in Northern Ireland?

No - You won’t need to pay taxes on your gambling winning if you are a resident of Northern Ireland.

Do I have to pay tax on gambling in England?

No - As a player, you are not required to pay tax on gambling winnings in England. The government does generate sizable revenue from betting, as casinos, bookmakers, and other licensed gambling operators do pay taxes on their profits.

Are gambling winnings taxed in Wales?

No - Gambling winnings aren’t taxed in Wales. You’ll be able to keep whatever you win whether you bet online or at a local venue.

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Updated: April 2020

If you need the tax rates for next year, click the link to get the current 2020-21 UK income tax rates.

Below is a look at the UK income tax rates for 2019-20. We’ll also explain how these changes will affect your tax bill.

How are income tax rates changing in 2019-20?

The government announces changes to income tax in the autumn budget. The most significant changes announced in the latest one — the Autumn Budget 2018 — were:

• A higher tax-free personal allowance threshold
• An increase to the ‘higher rate’ income tax threshold
• Changes to the National Insurance lower and higher earnings limits
• A temporary increase in the Annual Investment Allowance for the next two years

What are the UK income tax rates and brackets for 2019-20?

The new income tax rates and thresholds for 2019-20 are:

This means that the minimum income you have to earn in a year to start paying tax in the UK will now be £12,500. Similarly, the basic tax rate of 20 percent, which currently applies if you earn up to £46,350 a year, has been extended.

The government planned to make these increases in 2020-21 but decided to put them in place a year earlier. Chancellor Philip Hammond explained that the decision was a result of “the improvements we have delivered in the public finances.”

On the downside, the income tax thresholds will stay the same in 2020-21. The next revisions are planned for 2021-22 when the thresholds will increase in line with inflation.

The new rates apply only in England, Wales and Northern Ireland. Scotland sets its own income tax rates and thresholds.

We’ll deal with Scotland’s income tax rates for 2019-20 in a minute. First, let’s have a look at how your tax bill will change from 6 April 2019 if you live in another part of the UK.

Casino Tax

What are the current 2018-19 income tax rates and thresholds?

The current tax brackets in England, Wales and Northern Ireland are:

So how does this compare with the income tax rates that’ll kick in on 6 April 2019?

Well:

• You’ll be getting an additional £650 a year, tax-free
• You’ll pay the basic rate of tax, that is 20 percent, on an additional £3,000 a year
• If you’re on a low income, you’ll pay less tax
• If you’re a higher earner, you’ll also pay less tax

All in all, the government reckons 32 million people will have a lower tax bill as a result of these changes. Pretty good right?

Let’s crunch some numbers so you can get a better idea.

How much tax will I pay in 2019-20? [Example 1]

Let’s say you’re a sole trader. Your total income after deducting allowable expenses is £20,000 a year

Here’s how much tax you’d pay under the current income tax rules and how much you’ll pay in 2019-20.

Under the current thresholds:

• £11,850 is tax-free.
• This leaves you with a taxable income of £8,150, which falls within the basic rate threshold.
• So, your total tax liability would be 20 percent of £8,150, that is £1,630.

Under the income tax thresholds for 2019-20:

• £12,500 is tax-free.
• This means your taxable income would be £7,500.
• At the basic rate of 20 percent, your total tax liability would be £1,500.

This means you’ll be getting an extra £130 a year in your pocket in 2019-20.

How much tax will I pay in 2019-20?[Example 2]

Now, let’s say your income after deducting allowable expenses is £50,000.

Under the current income tax rates:

• £11,850 is tax-free.
• This leaves you with a taxable income of £38,150, of which:
  • £34,500 falls within the basic rate and is taxed at 20 percent.
  • The remaining £3,650 falls within the higher rate and is taxed at 40 percent.
• So, your total tax liability would be (34500 x 20%) + (3650 x 40%), that is £8,360.

Under the income tax thresholds for 2019-20:

• £12,500 is tax free.
• This means your total taxable income is £37,500.
• Since the basic rate threshold has gone up, all of your taxable income falls within the basic rate of 20 percent.
• So, you’d pay 20 percent of £37,500 in tax, which amounts to £7,500.

That’s £860 less than you’d pay this year.

What are the new income tax rates and brackets if I live in Scotland?

As we explained above, Scotland’s tax rates and thresholds are slightly different to the rest of the UK. The following table shows the income tax rates for 2019-20:

If you make more than £100,000 a year, your personal allowance goes down by £1 for every £2 you make. So, if you earn £101,000 a year, your tax-free personal allowance would go down by £250, making it £12,250.

How have Scottish income tax rates changed from 2018-19?

The main changes to the Scottish income tax rates in 2019-20 are:

• As in the rest of the UK, the tax-free personal allowance has gone up to £12,500 — a £650 a year increase over the current personal allowance.
• The starter rate threshold has gone up from £13,850 in 2018-19 to £14,549 in 2019-20.
• The basic rate threshold has also gone up, from £24,000 in 2018-19 to £24,944 in 2019-20.

How do the new Scottish income tax rates compare to the rates and brackets for the rest of the UK?

The main difference between Scotland’s income tax rates and those in the rest of the UK is that Scotland has five tax bands to the rest of the UK’s three.

The end result of this difference is that higher-income earners pay more tax in Scotland than they do in the rest of the UK. By contrast, Scottish lower-income earners pay less tax.

How much tax does a low-income earner pay in Scotland? [Example]

In our first example above, an income of £20,000 a year in 2019-20 would result in a tax bill of £1,500 if you live in England, Wales or Northern Ireland.

By contrast, under the Scottish tax system you’d pay tax as follows:

• £12,500 would be tax-free.
• Of the £7,500 of your taxable income:
  • £2,049 would be taxed at the starter rate of 19 percent.
  • £5,451 would be taxed at the basic rate of 20 percent.
• So, your total tax liability would be (2049 x 19%) + (5451 x 20%), that is £1479.51.

This is £20.49 a year less tax than you’d pay in England, Wales or Northern Ireland.

Example 4: How much tax does a high-income earner pay in Scotland?

In our second example, an income of £50,000 a year would result in a tax liability of £7,500 in 2019-20.

By contrast, in Scotland:

• £12,500 would be tax-free
• You’d have to pay tax on the remaining £37,500 as follows:
• 19 percent on £2,049
• 20 percent on £10,395
• 21 percent on £18,486
• 41 percent on £6,570
• This means your total tax bill would be £9,044.07

That’s £1544.07 more than you’d pay in England, Wales or Northern Ireland.

What about National Insurance thresholds?

Like income tax rates, National Insurance thresholds are also changing as from 6 April 2019. And this will affect the way you calculate your tax return.

Here’s a look at the new National Insurance thresholds and rates for employees and the self-employed and how they compare with 2018-19 rates.

How National Insurance will change for employees:

If you’re a higher-income earner, the widening of the National Insurance threshold means you’ll pay more NI in 2019-20. And this might eat up some of the savings you’ll make on income tax.

Casino Tax Rates

Case in point, if you have a yearly salary of £50,000, you’ll pay £4,964.16. This is a £336.64 increase over your 2018-19 tax bill.

That said, seeing as you’ll save £860 on income tax, you’ll still be better off.

How National Insurance will change for the self-employed:

The government recently announced it has decided to scrap plans to abolish Class 2 National Insurance. Instead, 2019-20 will see it rise by 5p a week.

The government has also adjusted the Class 4 National Insurance thresholds to bring them in line with the new income tax bands.

What about the increase in the annual investment allowance?

Revised income tax and National Insurance rates aside, the government has also increased the Annual Investment Allowance from £200,000 to £1 million.

The Annual Investment Allowance allows you to deduct from your income the full value of plant and machinery you use in your business. Which means you pay less tax.

The increase is temporary. It’ll only last for two years, after which the Annual Investment Allowance will go back down to £200,000. So if you were thinking of making a big investment to help your business grow, now’s the time to do it.

And there you have it. That’s a rundown of the most important income tax changes you should know about as we approach the 2019-20 tax year.

Here’s to a successful 2019.

One in which you reach new heights and, hopefully, pay less tax.

Andre Spiteri

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