UK Taxes on Bingo Winnings: What Players Must Know
Did you know 2 out of 5 bingo players are unaware winnings are taxable in the UK? It’s true! This guide will explain everything around taxes on bingo jackpots and prizes so you never get surprised by invisible deductions again.
We’ll cover Bingo Duty, the tax bingo operators pay on payouts which can get passed onto winners. You’ll also learn about personal income tax obligations if you hit a substantial jackpot. With this intel, you can make smart moves to hang onto more of your hard-won cash.
Don’t be part of the confused 40% – master bingo taxation to protect your next big win!
- Are Bingo Winnings Taxable?
- Bingo Taxes Made Simple: The Main Rules for Players
- The Accounting Period for Bingo Taxes
- What’s the Procedure for Paying Bingo Taxes?
- How to Tell When Your Taxes on Bingo Winnings Are Due
- Advice on UK Bingo Taxes
Are Bingo Winnings Taxable?
Yes, all bingo winnings are submitted to tax in the UK.
The Gambling Act of 2005 is the regulatory organ by which Bingo works and utilises the license criteria. The Betting and Gaming Duties Act 1981 stretches the primary law in other segments, e.g. 17 to 20C and Schedule 3. The Bingo Duty Regulations 2003 comprise secondary law.
Existing bingo clubs in the UK (England, Scotland, and Wales) are required to possess a bingo operating license according to the Gambling Act of 2005. On the other hand, promoters in Northern Ireland are also called for, under Chapter 2, part 3 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985, to possess such a license.
The amount bingo providers can charge their customers is regulated by the Department for Culture, Media and Sport. This applies to the entire UK except for Northern Ireland, where the Department of Health and Social Services regulates this law.
Bingo Taxes Made Simple: The Main Rules for Players
- Players that win a bingo game don’t pay a Bingo Duty fee for their prize
- In all other cases, players must pay the Bingo Duty tax
Each bingo promoter is obligated to pay bingo duty on their income by the end of every time there is revenue. Such action must occur due to the bingo promoters’ earnings, which occur between their earnings and all their expenses during the event.
Every participant spends cash to be a part of the game
Should they win the game, this fee is excluded from their prize. Unless the games qualify for an exemption, it is charged on all types of bingo games. This applies to all variations the game offers and to all alternatives bingo fans can play in the UK and its territorial sea.
The Bingo Duty concerns money spent in other forms, such as various tokens, vouchers, or various items players present in exchange for cards. These, however, must be valid for the trade, so everything is legitimate.
Bingo Duty Doesn’t Apply Everywhere
- Domestic bingo – A session held in a private place on an everyday occasion or similar.
- Non-profit bingo – Held in a gaming environment where players are not charged anything to play the game.
- Small-scale bingo – Hosts need to meet some specific criteria to adhere to the standards of this type of bingo-playing environment.
- Small-scale amusements provided commercially – This also has certain criteria that players need to meet. Only when those specific rules are met, which the provider has to learn by contacting specific authoritative organs, will Bingo Duty lose its power?
The above are some scenarios where Bingo Duty has no authority.
The Accounting Period for Bingo Taxes
- Standard period: 4-5 weeks
- Non-standard period: 27 – 35 days
The usual period lasts between 4 and 5 weeks and eventually finishes on each month’s last Sunday. Such an instance would be an accounting time frame starting on the 1st of the month and ending on the 28th, meaning a total of 4 weeks.
Yet, it’s not unusual for non-standard periods to occur. These can vary anywhere between 27 to 35 days. These terms ought to occur 12 times a year for a total of 53 weeks. This doesn’t have to mean that each such duration must have the same time length.
Wherever the atypical time-frames are about to get in motion, the bingo sites/hosts must first discuss this with the Gambling Duties team 4 weeks prior. The Gambling Duties team must receive clearly stated dates from start to finish of the 12th period in the request.
What’s the Procedure for Paying Bingo Taxes?
If you want to pay the taxes set on your bingo winnings, Bingo Duty Regulations 2003, or more specifically, 8(2)(a) and 8(2)(b), dissect the primary processes. Namely, the most important part of the process revolves around determining the payment method you can use.
The commissioners specify that electronic types of payments are allowed. HMRC allows a variety of payment options, but it’s best to use one of the following:
- BACS direct credit
- Online bank account payments
- Internet or phone banking
If you decide to use CHAPS, you must send the building society or your bank some additional information. These include:
- Sort code
- Account number
- Account name
- Payment amount
- Your bingo reference number
If you try to use Direct Debit, note that the ‘due date’ is the 15th of the month. Moreover, this method only allows paying up to £20 million. If you cannot complete the payment process, promptly send the HMRC a check containing your duty return.
Those who want to go through electronic payment must provide both the reason they’re paying and state the reference number of the type of bingo they host. It goes without saying that your balance should have sufficient funds to settle the payment.
How to Tell When Your Taxes on Bingo Winnings Are Due
All bingo hosts and promoters are held accountable for paying their Bingo Duty on the proceeds of their bingo promotions. This means they are obligated to pay 10% of their profits acquired by the bingo promotion, which takes place for every accounting period.
If you’re a bingo promoter, you must calculate the owed duty amount through several steps. These include working out bingo promotion profits, winnings expenditure, and bingo receipts, including the 10% of your bingo promotion gains.
Considering the receipts are the most critical part of these occasions, the following is an insight into the most important things you should know, including splitting the charges for a better perspective.
Work Out Bingo Receipts
Promoters’ bingo receipts will cover any money circulating during any accounting occasion. This applies to money that allows players to participate in a bingo event hosted by you. It makes no difference if the debt is owed to you or someone else.
Those who take the role of a marketer are advised to implement participation fees. It goes further as bingo promoters and hosts can also include stakes from main-stage bingo, which can be combined with the main bingo prize as well. These games can sometimes be executed in a mechanised bingo format.
Most rewards players can win are non-physical
Lower prizes that can be up to £70 are allowed to be given out in cash. Hosts mustn’t implement any kind of membership or other charges that are not linked to the essence of a bingo game.
Splitting the Charges
In a scenario where a charge is for more things besides playing bingo, that charge/fee must be presented into the few sums it applies to. This will reflect the amounts of the different charges. For a better perspective, the host should state that one part goes for admission, another for stakes and participation, and the last for a drink or a meal.
Advice on UK Bingo Taxes
- Follow the Code of Conduct and other regulations
- Always have the right documentation prepared
- Keep track of the changes in the legislation
- Keep the games according to all standards and rules
The regulations around bingo have been evolving for many years so both parties can get the best of the bingo world. At their current form, all providers of this game should always keep track of their charges and ensure they have the right documentation to apply and wrap up the tax process quickly.
All betting sites promoting a bingo event must respect the Code of Conduct and other connected regulations. This will ensure that you provide high-quality bingo games according to all standards.