Whether you bet once a year at the Grand National, or you’re a regular who wins big every evening playing poker, you’re probably wondering if you need to declare your winnings to HMRC.

Well, if you’re based in the UK, you’re in luck, because gambling here is legal, regulated and any cash you make is yours to keep. It’s the operators who provide these betting services that are the ones who foot the tax-bill, although there are some important considerations.

While the winnings are tax-free, you may need to pay income tax further down the line depending on what you do with them. We’ll take a look at what the tax rules are for your gambling and betting winnings.

Is gambling income taxable in the UK?

No matter how big you win, your gambling income is not taxed. This has been the status quo since 2001 when Gordon Brown abolished tax on gambling winnings and put the tax responsibility on betting companies, rather than individual players.
 

What if I’m a professional gambler?

HMRC doesn’t view gambling as a trade, so professional gamblers don’t need to pay tax on any of their winnings. As a professional gambler though, you likely partake in things like sponsorships, appearances, or even ads and various other activities linked to gambling. This income may be subject to income tax.

 
If you invest or earn any interest from your winnings then this may also be subject to income tax. In this case you’ll need to register for Self Assessment and declare your income on your tax return, unless the amount you earn is less than the trading allowance.

Remember, these are the rules inside the UK. If you’re a professional poker player who plays in different countries, local taxes may apply.

Do I need to pay Capital Gains Tax on my winnings?

You’re in luck – your winnings aren’t subject to Capital Gains Tax in the UK. The only time you may cross the border into Capital Gains territory is if you decide to use your winnings to invest in things like property or shares.

In short, the cash isn’t taxable the moment you’re handed your winnings, but what you choose to do with them next might be.

Interest on your gambling earnings

As you’ll know already (because we keep mentioning it) your gambling income isn’t subject to tax. But let’s say, for example, you put your income into a savings account. The interest you receive is classed as taxable income. If this is your only form of income (other than your gambling winnings) you’ll need to let HMRC know if the interest you earn exceeds the personal savings allowance.

There are more tax efficient options to consider, such as putting your winnings into an Individual Savings Account (ISA). This would allow you to put away £20,000 of your gambling income per year, without paying tax on the interest it earns.

Should I record my gambling income anyway?

Whilst it’s not mandatory, it could be beneficial to understand how much you’re winning – and perhaps more importantly – how much you’re losing. That way you can see whether you’re making a profit, or loss.

It can also help you live within your means. For instance, have you taken into consideration your bills, how much you spend on travel, and how much your food costs?

Not only that, if you’re living a lavish lifestyle, it could raise a few eyebrows. Especially HMRC’s. If they catch wind of your earnings, it’s good to have proof that it’s gambling income and therefore not taxable.

 
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