If you have played bingo online or in a bingo hall and won some money, you might be wondering something: should I be paying any tax on the money I’ve won? The answer to this question should make you smile though, as there is no requirement for those in the UK to pay tax on any gambling winnings, unlike in other countries, which can heavily tax those lucky enough to scoop some money.
On this page, we’ll look at why those in the UK are not required to pay tax, plus we’ll also look abroad to see how much those in the USA have to pay when they manage to win.
Gambling Taxation in the UK
It doesn’t matter whether you win £1 or £1 million – the UK government won’t ask you to part with a single penny of it. This has been the case since back in 2001, when the 9% tax on gambling winnings was scrapped and the government instead forced the gambling companies themselves to pay tax. Nowadays, all gambling companies, including online bingo sites, pay a tax of 15% on the money they earn, and this tax is highly lucrative for the UK government, as it earns them billions of pounds every year. This is despite gambling companies in the UK paying lower taxes than those in many other countries.
You should, of course, remember that there could be other taxes that come into play though. Perhaps the most significant is inheritance tax. If you leave the money you’ve won to someone in your will and it’s over £325,000, any money in excess of the figure will be taxed at 40%. Don’t think you can get away with it by giving the money to someone before you die either, as tax can be levied on anything given away for seven years before your death.
Overall though, those who win while playing bingo in the UK have a much better deal than those in the USA, as you’ll see next…
Taxation in the US
There are some other countries that have exceptionally high tax on gambling winnings, and one of these is the USA. In fact, many winners in the US don’t just pay tax once, but instead pay it to both the federal government and their state!
In the US, anyone winning over $1,200 playing bingo must report this to the federal government. They’re then made to pay a 24% tax on the money they’ve won. States often also take their share, so those winning a significant amount of money in the US certainly won’t get to keep everything they’ve won.
As you can see by the tax charged to gamblers in the US, those winning money in the UK are in a fortunate position!