The UK Tax System Applicable to Gambling
No one likes to pay tax, with some going to very extraordinary and even foolish lengths to avoid having the taxman take his ordained scoop out of their earnings. Gamblers in particular hate taxes, with most blokes in the UK having a special sort of disgust for the UK tax system.
Most of these gambling-loving blokes are simply uninformed or misinformed about what the tax system in the UK is all about and how it applies to gamble. Some even complain about having to pay taxes on wins.
So, how exactly does the UK tax system apply to gamble and is there any obligation to pay taxes on gambling wins? Let’s find out the answers to these and other questions.
Few Love the Uk Tax System
Contrary to what is being bandied about in pubs and back alleys, the UK tax system as it applies to gamble is actually very favourable to bettors. More so, it is quite easy to grasp, which is a great advantage because gamblers are not always the brightest bulb in the pack.
According to the stipulations of the UK tax system, gamblers are under no obligations whatsoever to pay tax on either their wins or stake.
As a result, gamblers do not need to go to the taxman and report how much they won or lost. This, of course, means that players are free to play any casino game and keep all wins without the government sending out an all-points bulletin and demanding its cut!
So, Who Does the Government Tax?
Well, the UK government has made the eminently sensible decision to tax casino operators rather than their clientele. That’s right, casinos give back some of the enormous revenues they make to the government in the form of taxes. This was however not so back in the days.
Before the government started listening to the bitter complaints of gamblers, the policy was to pay a tax on either the initial stake or the wins.
Needless to say, bettors in the UK were less than thrilled about being forced to put their money and sanity at risk by playing casino games and then obliged to share their wins with the taxman. Then came 2002 and the UK government rightly grew concerned that the UK gambling industry was becoming seriously uncompetitive, especially with the phenomenal growth of the UK online casinos.
The decision was then taken to abolish all gambling taxes that applied to players. This was successful in enlivening the UK gambling industry and perhaps saving a few taxmen from being throttled to death.
Uk Tax System and Professional Gamblers
Some people gamble professionally. That means they live off their gambling wins. A few of the more successful ones earn millions of pounds per year, while most have to make do with a few thousand pounds per month.
Professional gamblers are virtually protected classes in the UK. That means their earnings are not taxed in any way.
This might appear ludicrous but the reasoning is quite simple. Say, a professional gambler gambled and lost, under the current UK tax system in existence such a gambler can claim back all of his losses from the government! As to be expected, no government yet created would stand for such nonsense as essentially subsidising gambling losses and that is why the decision was taken not to tax UK professional gamblers.
Taxing professional gamblers would also mean that just about anyone could claim to be a professional gambler, waltz into a casino, get taken to the cleaners and apply to the government for a refund! With that being the case, not taxing gamblers seem to be the only recourse.
Gambling Operators and the Uk Tax System
As to be expected, UK gambling operators were not exactly ecstatic to be paying the taxes their clientele were previously paying. Some of these operators resorted to running their operations from a few designated tax havens. One such tax haven is Malta where so many UK casinos are registered there.
As more and more UK gambling companies began using tax havens, the UK government reacted by introducing what is called the Point of Consumption Tax (POCT). The essence of this tax is that all casino operators must pay a tax if their services are being offered to UK citizens.
The UK tax system as it applies to gamble and gambling activities are as simple as can be and easily understood. Gamblers should, therefore, check out its main points and memorize these, rather than making up things they don’t know and putting it out there is ironclad gospel!
As UK gamblers are not taxed in any way, there are few places as sweet, fun and rewarding as the UK for playing all sorts of casino games.
Review Name : The UK Tax System Applicable to Gambling
Author : Aaron Cooper
Published Date : 15/08/2019