Tax on gambling winnings

Can't tax winnings as on other side you can claim tax relief for losses

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.

stocks • August 4, 2024 9:10 AM BST
Can't tax winnings as on other side you can claim tax relief for losses

settled law means that gambling winnings can't be subject to income tax, so she wouldn't be able to subject them to income tax without creating a new schedule. She can simply bring back betting duty on payouts. The only result of this would be mass redundancies in the licensed sector and a huge boost in numbers betting in the black market.

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.

Widely reported that Rachel reeves is to implement a tax on gambling winnings

Can OP link one of the, presumably many, sources?

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.

to get back on topic mr blair removed "betting tax on winnings", despite ericster's insistence that "This is what labour governments do". And more remarkably "We knew this would happen".

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.

The UK doesn’t (unless you are a professional gambler so gambling becomes your trade or profession)

That is a very dubious statement

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.

The Labour Party and the BHA are killing horseracing in the UK; fobt was the instigator; Mr Rust the catalyst. What good is the abolition of the betting tax (by Mr Blair/Labour Party) if fewer and fewer recreational punters cannot place bets with bookies? Only a plonker like Mr Blair could have implemented this policy. Then again Mr Blair was a mediocre lawyer (not KC). Also, Mr Blair was a poodle of Mr Bush in the Iraq War.

If the recent statement by a bookie head honcho is taken on trust horseracing in the UK is a loss leader. Who'd have envisaged that just barely 25 years after the introduction of fobt by Mr Blair and the Labour Party aided and abetted by Mr Rust at the BHA.

@ 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.

The only way Reeves gets to tax winnings is

a) bringing back some sort of duty

b) creating a new tax schedule

c) instructing HMRC to attempt to tax an example case and going to court to try and get a ruling that the activity of certain individuals in gambling markets is actually a trade.

a) means huge move offshore (bet 365's owner's will also prob gtf and stop paying their huge amounts of income tax)

b) results in everyone in the country doing a tax return at huge cost

c) will take a long time and will create huge tax loopholes

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.

Gamblers are already being taxed by HMRC, albeit indirectly.

GBD is charged at 15% on commission charges:

charged by a betting exchange to any party to the bet who is a UK person regardless of where the betting exchange is located.

This is only a small amount if you are on 2% commission but significantly higher if you pay PC.

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.

Just introduce a different tax structure for fobt and online games/slots.

Totally agree - including all 'pure luck' forms of gambling parasites that exist - and we all know they have plenty cash to spend on constatnt TV ads.

Some smaller ones might die off if more fully taxed, but many whales would be just fine.

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

And you probably pay a small amount of tax if you invest your winnings unless they are all in ISAs. Paying tax is the least of our troubles as regular recreational gamblers. A ban on racing is more likely. This Government has the same mentality as China. Do as we tell you and all will seem fine-until you question us when you will be subject to all sorts of inconvenience.

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

As said by some others, I think this is actually very unlikely to see the light of day in reality - a minefield.

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.

"I've had a very comfortable retirement..."

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.

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.

This Government has the same mentality as China ....must be one of the most daft comments i have ever read on
this forum,and the bar is set very high.

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.

Wouldnt affect anyone on here we dont win.

'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!

Ericster "this is what Labour do"

Explain this please Eric

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!

China has been the extreme example but for many years, a lot of other countries are drifting in the same direction. Democracy only makes very limited changes. Teachers and Civil Servants are the ones who change public attitudes much more than politicians and those groups are relentlessly left leaning and controlling.

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).

Almost certainly, fragrant Rachel will impose sweeping tax on Lottery winnings, just like Spain and Portugal do on Euromillions (currently 20 per cent). If the lady does the unthinkable and reintroduces betting tax, then I'll once again entrust my stakes with Artful Arfur Daley down the Crooked Billet!

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.

Not going too well for older Punters Heating Gone Pension Taved and now Winnings deductions ?

Pensions have always been taxable.

You have to laugh as one minute baby boomers are getting favourable treatment and the next everyone pretends to be sorry for them.

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

It was time for Change

Betfair scarfs might prove popular this year.

Are the betting shops still well heated? Or only the fobt? Any kettle to make a cup of coffee?

Aug 4, 2024 -- 10:08AM, dave1357 wrote:

to get back on topic mr blair removed "betting tax on winnings", despite ericster's insistence that "This is what labour governments do". And more remarkably "We knew this would happen".

I'm sorry for the misunderstanding here.
No of course I didn't know, DON'T KNOW, if betting would, or will be,  hit with taxation in any way shape or form.
It's just taxes in general.

That's just my take on it.
Whatever happens there's not much any of can do about.
We shall see eh?

Any of US even.

There’s already a tax on winnings,brown not Blair brought that in,the bookies pay it on behalf of the punters.so I don’t see this as a policy that will happen,just more g1 news bluster.

Gb news

comingupthehill • August 4, 2024 9:38 PM BST
There’s already a tax on winnings

but not a tax on winners when it was brought in, as it was based on gross profit, which winners reduce (but now irrelevant as they won't take bets from winners). The exchange of course is different as it is 15% of commission.

Will take years 5 plus to implement. Don't worry lads and lasses for now.

@marksman

"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."

I suppose that is true in the narrow sense that you cannot use capital losses to offset income - but you can use CGT losses to offset gains in the year in which they occur, and reach back and use past years CGT losses against gains in the current year.

No government will re-introduce betting tax on winnings. The amount raised would be tiny compared to the level of national debt and would upset too many Labour voters.

Also, you can offset losses on shares against gains on other shares - IE bed and breakfasting.

But I do wonder if you setup a registered company and listed its business as share-trading, could losses in the first 4 years of trading be claimed back against income tax paid in the past 4 years, including PAYE - as used to be the case in business?

I don't know if you still can do that for a new venture but I did it myself for two years back in 1994/1995 after a business I started went nowhere.

There never was a "tax" on winnings , it was a duty imposed by Government on bookies of 6.75 % who charged punters 9% but who had the option to pay on the bet placement stake.

Agree with Sparrow about pensions being taxed. Every time my state pension rises, more tax is taken from a private one so in effect any State Pension above £12570 is taxed by removing the equivalent amount from any other taxable income. They are too cowardly to take the tax from the State Pension so they take it by the back door. If the personal allowance stays where it is, my private pension will fall to zero eventually.

The tax due on my state pension is taken from my occupational scheme which I had been paying in to for 34 years.

I wouldn't be so sure about Labour not taxing winnings on account of it upsetting its voters. For a start, the days of when its voters comprised horny-handed toilers who enjoy a bet are long-gone. But never mind that: read that quote from Tax Police Associates which Andriy posted on page 1:

It [taxing gambling winnings] would have two ancillary benefits: (1) discourage gambling (in a way that raising betting duties would not) ...

The issue of whether it would raise a significant amount of money isn't relevant to these people. To them it's self-evident that discouraging gambling is a Good Thing.

If you're wondering who Tax Policy Associates are, they're in fact a bloke called Dan Neidle. He's a Labour activist who sits on the Party's senior disciplinary body. This is the sort of specimen we're up against.

sparrow / sageform

But how tax is collected makes no difference in the end - you have state pension, a private pension, a total pension income, an amount of tax due on that total - it matters not which income source it is collected from?

I was going to explain that he was the one who was wrong with this statement (but cba reg'ing and spending ten minutes clicking on motor cycles or traffic lights).

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.

Exactly, longbridge.

Sageform , correct but imagine the shock the people who receive state pension , private pension and still work , that's the pecking order in reverse so workers not aware thinking state is normal , private is normal then seeing their face when opening their wage slip would have been a picture   

Thankfully my sister was spared of the surprise as i'd worked out she'd take home around 50% of her gross for that month.

It really shouldn't be a shock but - in my experience - a lot of people are not well-informed about personal finance.

longbridge, it looks like I'm one of those not well-informed.
I never knew that you can use CGT losses to offset gains in the year in which they occur, and reach back and use past years CGT losses against gains in the current year until you posted it above.

It's a pity that doesn't apply to Premium Charge so that I could claim back some PC when I have losing years.:(

marksman - basics are here

https://www.gov.uk/capital-gains-tax/losses