Gambling Winnings Taxable In Illinois
Is Gambling Winnings Taxable Income
Is Gambling Winnings Taxable In Alabama
North Carolina Gambling Winnings Taxable
Is Gambling Winnings Taxable In Pa
Is Gambling Winnings Taxable In Illinois

And the reason for the decision not to tax is also quite simple: there wouldn't be any tax revenue. Indeed, there would be a revenue loss. The point about betting of all types, including this spread betting, is that the winnings of some people are, and must be, entirely offset by the losses of others. 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.

25/02/2015, by Julie Butler, FCA, Tax Articles - Income Tax

People holding UK passports/ are resident in the UK are exempt from taxes or with holdings on gambling winnings thanks to a treaty the USA has with a dozen or so countries.including the UK. You will need a TIN number, but the casino will do all that for you.it takes about 20mins or so and you can walk away with your winnings in full. To my mind there is a chance the Revenue could pursue your gambling profits as trading income, but I do appreciate the liklihood is that it wouldn't. To be certain however, I would recommend obtaining formal clearance that the profits (in your circumstances) are exempt from tax.

Rate:

Rating: 5/5 from 2 people

Can gambling be taxed as earnings? Julie Butler considers a recent case on gambling which covers issues frequently raised in the TaxationWeb forum.

Gambling and Taxation

Essentially betting is ‘tax-free’ in the UK – the professional gambler is outside the scope of tax. This is confirmed in HMRC’s Business Income Manual at BIM22015. The basic position is that betting and gambling, as such, do not constitute trading. This is not a new precedent either. Rowlatt J said in Graham v Green (1925) 9 TC 309: “A bet is merely an irrational agreement that one person should pay another person on the happening of an event.”

This decision has stood the test of time. In an Australian case, Evans v FCT (1989) 20 ATC 4540, Hill J said: “There has been no decision of a court in Australia nor, so far as I am aware, in the United Kingdom where it has been held that a mere punter was carrying on a business.”

A recent case has tested this principle. In Hakki v Secretary of State for Work and Pensions [2014] EWCA Civ 530 Mr Hakki was a professional poker player who made a living from his poker winnings. An order for Mr Hakki to pay child maintenance was applied for through the Child Support Agency by the mother of his children (Mrs Blair).

In accordance with the Social Security Contributions and Benefits Act 1992 (SSCBA 1992) s2(1)(b) and the Child Support (Maintenance Assessment and Special Cases) Regulations 1992 Mr Hakki opposed the application on the grounds that his poker winnings did not constitute ‘earnings’ from gainful employment and therefore he was not a self-employed earner, i.e., the profits arose from gambling.

It is very interesting to note that the Upper Tribunal found that for the purposes of SSCBA 1992, gambling could be a trade, profession or vocation, and that Mr Hakki could be said to be ‘gainfully employed’ as a ‘self-employed earner’ and therefore should pay child maintenance to Mrs Blair.

Gambling Winnings Taxable In Illinois

Mr Hakki appealed to the Court of Appeal. Mrs Blair’s barrister argued that Hakki’s poker playing amounted to a trade similar to that of a professional golfer or tennis player. The barrister relied on the findings that Mr Hakki:

Set a target sum to win after which he stopped;
Selected the table which was most likely to pay him;
Appeared on a television programme about poker for a few weeks, made it to the final and won a prize;
Was the owner of his own website and communicated his strategies for online poker;
Had his poker results over seven or eight years published on two other poker websites; and
Chose the locations for playing poker.

The Court of Appeal found that even collectively these findings do not amount to such organisation as to constitute a trade, profession or vocation. The Court of Appeal found that gambling is not a trade and the factors surrounding Mr Hakki must be common to many successful gamblers, e.g., choice of location, setting target sums and the table most likely to pay. It was found that isolated appearances on television and Mr Hakki having his own website was not in 2014 evidence of organisation amounting to a trade or profession. It is also very interesting to note that the court was persuaded that it is possible to accept a case in which a gambler’s winnings might be taxable, but it found that in this case there was no organised seeking of emoluments and therefore no gainful employment.

This case adds to the ongoing discussion about whether a gambler in certain circumstances can be taxed on his or her winnings.

Will there be future legislation that brings gambling profits into the scope of taxation? There has apparently been nothing to indicate that this is under review despite the advent of very sophisticated techniques to make substantial profits from gambling. It has to be asked, what is “the case” that the courts can find as taxable? Is that perhaps the case with sophisticated software?

Back to Tax Articles

Comments

Is Gambling Winnings Taxable Income

Please register or log in to add comments.

Is Gambling Winnings Taxable In Alabama

more...

Latest Tax News and Articles

Click on the button below to get the most burning tax topics delivered to your email.

Subscribe to Our Newsletter

A common question that often concerns those people who are new to gambling revolves around tax liabilities and here we take a look at the very simple question of whether or not you must pay tax on gambling winnings. Please note that we are looking here only at people who are resident in the UK for tax purposes. Non-UK citizens or anyone not in the UK should check with the relevant tax authorities wherever they are based and according to the laws of their country of residence.

For many the idea that winnings from gambling could be tax free seems too good to be true but we are happy to report that, quite simply, gambling winnings are indeed tax free in the UK. You may read on various forum posts written by self-proclaimed experts talking of grey areas and posing abstract hypothetical questions but we can categorically and emphatically say that you do not need to pay tax on any profit accrued from gambling. This is true for one-off punters who happen to land a big win, professional gamblers raking in tens of thousands of pounds a year and regular punters who sometimes win and sometimes lose.

History of UK Gambling Taxes

1961 to 2001: 9% Tax on Stake or Winnings

The tax-free status of gambling in the UK has not always been in place, however, and until relatively recently punters did have to pay tax on their bets/winnings. Betting shops were legalised in the UK in the 1960s and from then until 2001 there was a 9% tax levied against bettors. The punter could choose to pay the 9% tax up front based on the stake or, advisable if backing a long odds outsider, opt to pay the tax only if the bet was a winner, but with the 9% being applied to the winnings, rather than the stake.

Tax Paid On Stake	Tax Paid On Winnings
Stake	£10	£10
Odds	10/1	10/1
Winnings	£100	£100
Amount Of Tax Paid	90p

Is Gambling Winnings Taxable Uk