UK Poker Tax
Few love the idea of paying over 20% or more of their earnings to the government. If you’re consistently winning at poker with a decent win rate and worried about the tax implications in UK, don’t worry! We will do our best to answer UK poker tax related questions in this article.
*Please note that whilst this article was written in 2020, the rules still apply today*.
Do you have to pay tax on poker winnings in the UK?
Gambling and poker winnings are not taxed in the UK. This is music to the ears of poker players based in UK. It doesn’t matter whether you play online poker or at the casino. Both are considered gambling winnings and thus not taxable. This law has been in place since 2001 when Gordon Brown, then Chancellor of Exchequer got rid of it. This was largely due to the perceived threat of offshore betting.
There is no tax on poker winnings online or in casinos the United Kingdom. You get to keep 100% of your winnings.
Why is there no UK poker tax?
Simply put, the government makes enough money from the operators themselves. An industry that literally generates billions of pounds every year. There is a tax levy that the gambling operators must pay. Like any other business that operates, they pay tax on their profits. After laws changed in the early 2000’s the UK passed the Gambling Act 2005 and founded the UK Gambling Commission. Both designed to ensure compliance and regulate online gambling.
The Gambling Act 2005
This law had three main objectives; prevention of gambling becoming source of crime or supporting crime, ensuring gambling is fair and open and protecting children or vulnerable parties being exploited by gambling.
What about gambling winnings abroad?
It depends what you mean by abroad really. If you are playing on an online poker site based off-shore, you are safe. The UK Gambling Commission insists that any site offering gambling to Brits have to be licensed. Where they are based is irrelevant. Thus, you are safe here. If you are gambling abroad in USA or any other country that taxes gambling winnings, you should do due diligence of the law in that country.
In the USA, you are not required to pay tax on winnings. However, you will need to declare it to IRS. There are a couple of forms you will need to fill in to ensure you can bring back all your winnings. These are the W-8BEN and W-7.
Winnings in Las Vegas are not taxed for UK residents, however, you need to fill in a few forms and show your passport.
Professional UK poker tax?
Again, no tax is applied. HMRC makes no distinction between professional poker playing or hobby. This doesn’t mean you shouldn’t record keep your winnings though. As a professional, you should always keep accurate records so you know your winnings on a monthly and annual basis. In addition to being common sense, it’s sensible to retain records if you are ever investigated. If you want help with record keeping, I recommend reading our poker spreadsheet article. We offer customised dashboard and monthly reports for a low monthly fee.
If you are concerned about taxes, please consult a qualified tax accountant or contact HMRC directly. The content in this article has been researched but I am not a tax accountant and the article is used as a guide. References to relevant laws and authorities are below.
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