Tax on gambling winnings

Stocks, they can do whatever they want:  Already capital gains tax is applied when you make a profit trading in property, shares, bullion etc.
But, conversely, you get no tax relief when your trade results in a loss.

All I would say is this;
This is what labour governments do.
We knew this would happen.
You wanted the tories out?
Be careful what you wish for eh?
To all those people who voted the reds in.
It was of course a total knee-jerk.
Act in haste, repent at leisure.

Mr Blair introduced fobt into betting shops; Mr Blair opened the immigration door to free movement of people for cheap labour; Mr Blair went to war in Iraq knowing there was no weapon of mass destruction (wmd).

And, who is Mr Blair? A stooge of the Labour Party and UK plc.

it was proposed by a tax policy unit (maybe other similar sources exist), suggesting it would make 1-3 billion, but considered unlikely,
https://taxpolicy.org.uk/2024/08/01/rachel-reeves-raise-22bn-of-tax/

Tax gambling winnings £1-3bn. The US taxes gambling winnings. The UK doesn’t (unless you are a professional gambler so gambling becomes your trade or profession). In theory this would raise £1-3bn.8 It would have two ancillary benefits: (1) discourage gambling (in a way that raising betting duties would not), (2) end the oddity that spread betting isn’t taxable when equivalent derivative transactions are. But there are two big downsides. First, it would be (in my view) unfair to tax gambling winnings without giving relief for gambling losses (as the US does). That reduces the yield. It also creates a relief that would be exploited for tax avoidance and tax evasion.9 Second, it would in practice be regressive, hitting the poor disproportionately. So, whilst an interesting thought, I can’t see this happening.

quite a bit of feedback in the replies regarding the Gambling tax feasibility

Eldrick says:
3 August 2024 at 12:02pm
“The US taxes gambling winnings. The UK doesn’t (unless you are a professional gambler so gambling becomes your trade or profession)”

I am not aware of a single UK pro gambler paying tax on their winnings due to it being treated as carrying out a trade.

Technically it could still happen one day, but HMRC’s position for at least the last two decades has been underpinned by this:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22017

It is not unknown for HMRC to make life very difficult for professional gamblers by freezing their assets, for many months with next to no explanation.

But these were money laundering investigations, HMRC were not interested in trying to tax the winnings. My impression is their starting point is to assume you’re lying if you say you are a professional gambler, and once you’ve proven you really are, they simply let you go.

Reply
Dan says:
3 August 2024 at 1:29pm
that’s very interesting. Strictly speaking it’s wrong – a professional gambler, i.e. someone who makes a living from gambling, absolutely should be taxed on their livings. I wonder if this is a calculation by HMRC that most people who claim to be professional gamblers in fact lose money, and HMRC would lose out if it relieved their losses more than it would gain by taxing their winnings?

Reply
Eldrick says:
3 August 2024 at 5:41pm
I agree it should be taxable. In the US gambling losses are tax deductible, but only against your winnings, if you have any. A recreational punter losing regularly doesn’t get any tax relief.

The argument that if you tax winners then you have to give tax relief to losers has never been true, but I have heard UK based accountants argue it for many years.

HMRC did look in some detail as to how pro gamblers were operating on Betfair (somewhere around 2007 or so?) as they were considering if and how they might tax them. The upshot of their time spent in Betfair’s offices was they decided to leave it.

Big winners on Betfair have had to pay something called Premium Charge since 2008. It felt a lot like paying tax! In theory this charge does inflate Betfair’s profits which might result in a higher amount paid in corporation tax, but it’s hardly the same thing as HMRC taxing the gambler.

The wealthiest pro gambler in the UK that I am aware of has a reported estimated net worth £1.3bn or so. His betting syndicate headhunts talent from around the betting industry, he used to call it the millionaire factory – back when a million put you a lot higher up the ladder than it does now.

Not many in his league, but there’s a decent handful who have made tens of millions, some have written books about it.

@ andriy - it's settled law. It's in HMRC's tax manual. There is no such thing as a "professional gambler" in the UK and anyone stating otherwise is simply speakng from ignorance.

There is no need to crack a nut with a sledge hammer. Just introduce a different tax structure for fobt and online games/slots. It's so simple. QED!

Any non-cooperating bookie can sod off leaving those behind a bigger slice of the profit pie. I'm certain betting entities from overseas will take up any slack from the non-cooperating greedy bookies. There's a surplus of bookies anyway.

I've had a very comfortable retirement (retired at 53) thanks to a Labour Government changing the betting tax and many others have made a good living from that change.

But let's not facts get in the way.

I think sites like Gala Bingo (and all it's clones in Bingo) spring to mind also as good example...

I think you missed that the govt has changed, sageform.

Point taken Dave. it is a worldwide scourge for Governments to treat everyone like 10yos and punish anyone brave enough to question them. No doubt everyone identified by the police at any of the recent demos and riots will have their cards marked for life and be scrutinised every time they walk past a camera. Fortunately there are none on country walks in wildlife reserves which is 90% of my activity outside of my house. Unless they are watching from space, I doubt if I appear on CCTV more than once a year.

If that is aimed at me, I worked on the family farm from age 12 until I retired and still work away in the garden, in holiday lets and as a wildlife volunteer at age 80 and fully expect 50% of my hard earned savings to be confiscated to pay for benefits before I die. My only chance is to walk under a bus before October 30.

progressive decline of horseracing wouldn't be solved by reintroducing betting tax that money would just go into the general pot. Sorting out the Levy model once and for all would help.

'sageform', my post was not directed at you.

Using China as a comparison is moronic; there is no democracy in China (just flavour of the month) as demonstrated by former power-wielding publicly hauled-away on a political platform. I think there is no legalised gambling in China except the lotteries and stock markets (to create credibility to the world) despite crooks aplenty in some cryptos).

Anyone not knowing why China does not legalise horse racing or online gambling of any kind ought not to post on this forum. Gambling is addictive, and a scourge to families and society. A precursor to drug usage and drug dealing; fobt = crack cocaine usage (eventually) = fraud/theft.

The money donated by bookies fined for fobt misgovernance to help problem gamblers and fobt addicts has been "directed" to individuals once fed from the trough of bookies. How ironic!

Drug pushers turning drug advisors/enforcers. Charming and scandalous!

The party politic arguments about gambling rulings are a bit of red-herring - both parties have been against gambling at some point recently - I don't think we have a 'gambling party' we could ever rely on to vote for!

Impossible "At the expense of problem gambling and a progressive decline of horseracing in the UK. As long as a few are "blessed", no worries at all."

It is a bit of a stretch to blame tax changes on problem gambling and horseracing decline (bookmakers have more to answer on that score).

Not in its entirety 'Braian'. However, I do think with the abolition of betting tax the bookies were given virtually a carte blanche to bring in fobt as revenue/tax replacement eg bookies were competing with one another and saturating the high streets with bookie shops.

Pensions have always been taxable.

Labours new 2 tax policies won’t affect us guys here on the forum.

We sit in the cold in our coats,so don’t need the winter fuel payment,and we never win so won’t have to pay any tax.its a win win