If primary source of income, are gambling winnings taxable in UK?

[buffyslayer1]

Revisiting an old issue here, but can anyone find me any Government literature that confirms that gambling earnings in the UK aren't taxable, even if it your primary income? Just had Dad on the phone who's met a lawyer & ex accountant who assured him that if it's your primary income then you DO have to pay tax on it.

I need something official to prove him otherwise. Thanks.

Even if you could easily evade- morally, should we be paying taxes?

Well you don't need to evade so that's good.

Not particularly a 'morally' thing but along those lines; I can't think of any reason why gambling shouldn't be taxed, at a minimum, as capital gains like other forms of investment.

I think the UK took this stance because of online betting which would be hard to police to get around taxation and pressure from the UK betting lobby which is pretty powerful.

I guess also it would get very messy from a admin point of view for HMRC as well because if they could tax gains then there must be a way you could offset losses otherwise nobody would be gambling. So it would be a nightmare for the tax code/system here ala USA.

the "stance" was taken decades ago, before computers existed much less online betting.

The settled law is that gambling is not a profession or trade and therefore can't be taxed as income under the present schedules.  The govt could create a new tax schedule specifically for gambling, but as you point out this would be an admin nightmare and result in millions more people having to complete tax returns and would also be virtually unenforceable (easy to manufacture losses in casinos for example).  So very unlikely to be a revenue source.

Having said that I do think that there are some areas that sail pretty close to the wind as being "organised efforts" and therefore taxable businesses.  Large scale poker staking and automated market making on betfair being the two main ones.    

Wasn't there a court case about 15 years back between a poker club and the government where they tried to prove poker was a skill game and to be taxed which would have allowed them a licence for the club to be legal?

Skill is completely irrelevant to the tax position and skill at cards was specifically mentioned in the judgement

 I am a bit young to recall properly but didn't you used to pay taxes on gambling winnings at one point? I am sure you had the option to pay a tax before your bet or after if you won?

or was this a different type of taxation to what is being talked about here that was replaced by something else?

[doubleup]

That was betting duty which only applied to bets in bookies and not poker or other casino winnings.  It was abolished and replaced by a tax on bookies and casinos gross profits (this was extended to cover online later).   

[nirvana]

I think it's worth establishing the principle that net gains should be taxed irrespective of whether it's difficult to collect or anything is actually collected

It would be a pointless exercise.  Thousands would commit unintentional tax evasion by forgetting about a £50 win in an old Victor Account and you’d need to check people’s declarations for the year or it would be a waste of time.  HMRC already effectively taxes punters’ losses via betting duty.

I'm not really thinking about this level of win. More like gains that are greater than the CGT allowance ..I can't think of a good reason why we wouldn't tax this.

Agree with most that trying to tax as income is kind of pointless and inconsistent.

[doubleup]

An interesting side point about the present position is that winning bookmaker sports betters actually reduce the tax revenue by reducing gambling firms gross profits, but winning poker and exchange players pay 15% of their rake/commission in tax

[neeko]

Didn’t Finland try and tax Antonius for $250m in income as part of his heads up matches with durrr as they didn’t look at net winnings.

[lucky_scrote]

Tax free. Very lucky to be tax free too, it's not feasible to play poker from most other countries around the world. The Netherlands charge 30% tax per month, so if you win 10k in Jan and lose 10k in Feb then you are 3k out of pocket .

[doubleup]

Didn’t Finland try and tax Antonius for $250m in income as part of his heads up matches with durrr as they didn’t look at net winnings.

I doubt that Finland will try to tax cambridgealex but I might be wrong.

There are some idiotic rules around eg greece (taxed on any profit in a day) that simply fleece the uninitiated and cause them never to gamble again on a licenced site.  Those in the know avoid the greek tax by entering tournaments well in advance and reducing their balance if they have a winning day.

[shipitgood]

I wanted to get an objective answer so asked a non poker playing friend if he felt income from poker should be taxable.

His answer was really interesting: He felt it would depend how much revenue it would generate as it would cost a lot to change tax rules and all the bureaucracy that would go with it.

He asked how many players would be impacted by this. At a guess I would say there's not much more than maybe 150-200 players in the UK that earn in excess of £50k per annum playing poker and the vast majority of "professionals" probably earn in the region of £20,000.00-£30,000.00, maybe about a 1000 of these players. These were  just guesses and of course it's hard to produce any real stats on this.


He concluded that with all the hassle that would be incurred in changing the rules, and the compartively small number of players making an income from the game it would be best to keep the status quo.

[Pokerpops]

I wanted to get an objective answer so asked a non poker playing friend if he felt income from poker should be taxable.

His answer was really interesting: He felt it would depend how much revenue it would generate as it would cost a lot to change tax rules and all the bureaucracy that would go with it.

He asked how many players would be impacted by this. At a guess I would say there's not much more than maybe 150-200 players in the UK that earn in excess of £50k per annum playing poker and the vast majority of "professionals" probably earn in the region of £20,000.00-£30,000.00, maybe about a 1000 of these players. These were  just guesses and of course it's hard to produce any real stats on this.


He concluded that with all the hassle that would be incurred in changing the rules, and the compartively small number of players making an income from the game it would be best to keep the status quo.

Pretty sure that every poker player and gambler in the country makes a profit.*



* results of a small unscientific survey that asked the question “do you win more than you lose?”

[Marky147]

I wanted to get an objective answer so asked a non poker playing friend if he felt income from poker should be taxable.

His answer was really interesting: He felt it would depend how much revenue it would generate as it would cost a lot to change tax rules and all the bureaucracy that would go with it.

He asked how many players would be impacted by this. At a guess I would say there's not much more than maybe 150-200 players in the UK that earn in excess of £50k per annum playing poker and the vast majority of "professionals" probably earn in the region of £20,000.00-£30,000.00, maybe about a 1000 of these players. These were  just guesses and of course it's hard to produce any real stats on this.


He concluded that with all the hassle that would be incurred in changing the rules, and the compartively small number of players making an income from the game it would be best to keep the status quo.

Pretty sure that every poker player and gambler in the country makes a profit.*



* results of a small unscientific survey that asked the question “do you win more than you lose?”