Do You Pay Tax On Betting?
Betting tax may still be applicable in some countries around the world, but it was abolished by Gordon Brown in the United Kingdom in 2001.
For those of us who are still old enough to remember, the UK government used to charge the bookmakers a 6.75% levy. The bookmakers then passed that on to the punters as a 9% betting tax, which you could pay on top of your stake or have 9% deducted from your winnings and stake if your bet won.
But there’s no need to worry about that anymore – as you can now bet tax-free in the United Kingdom.
Are All Winnings From Gambling Tax Free?
Yes, just as bookmakers can no longer charge you betting tax, the Inland Revenue currently can’t charge you income tax or on other form of tax on any winnings you make from gambling. That’s true of gambling on horses, other types of sports betting, scratch cards, casino betting, and even the National Lottery.
Are Betfair Winnings Tax Free?
Betfair and the other betting exchanges changed the face of betting in England, due to punters being able to both back and lay horses. Laying horses, theoretically, made punters into bookmakers, and bookmakers are taxed on their earnings.
But, yes, all winnings from Betfair are currently tax-free according to the Inland Revenue. That’s why thousands of punters are looking to make an extra tax-free income from betting on Betfair and the other betting exchanges.
If you haven’t had a bet on a betting exchange before, please note that you will be charged a commission on any winnings you make on the betting exchanges. However, this commission is to cover running costs and to generate a profit for their shareholders – rather than being a tax.
What is Betfair’s Premium Charge?
Betfair Premium Charge, again, isn’t a tax, but it is worth taking a note of its limitations if you’re a serious punter. The Premium Charge is something that the biggest winners on Betfair say has been applied to their accounts once they’ve reached £250,000 of winnings. The Premium charge is, apparently, 60%.
However, if you’ve already banked a cool £250,000 in winnings on Betfair – you probably haven’t got too much to complain about.
Should You Declare Gambling Winnings To The Inland Revenue?
No, you don’t have to declare any gambling winnings to the Inland Revenue (at the time of publishing). However, if you win a lot of money and you fear the Inland Revenue may ask you to prove how you got it, it’s a good idea to keep records of your winning bets so you can prove where it came from if need be. For example, if you’ve been lucky enough to buy a car of a house with your winnings, it may just be flagged at the Tax Office.
Whether the Inland Revenue notice or not, providing you can prove you won the money gambling, you won’t be asked to pay tax on your winnings.
That’s because the government has made the bookmakers liable for tax. These are the people or companies that tend to make the most money form gambling and they are taxed on their yearly profits from the betting industry.
We hope that’s answered your question about, do you pay tax on betting. If you’re looking for more information about betting, please feel free to explore our blog where you’ll find hundreds of useful articles. If you’re looking for ways to make a tax-free income from betting, check out our free tips or take a look at the profiles of our proven profitable tipsters.