How to handle Hungarian gambling winnings sent via PayPal

SpectralNova

Hi all,
I’m in a bit of a grey area and would really appreciate any advice or shared experience.

Over the past few months, I’ve occasionally played on some Hungarian gambling websites and ended up with winnings of just over £2,000. I withdrew the money to my PayPal account rather than directly to my bank.

Now I’m uncertain about how to handle this from a UK tax perspective. My understanding is that gambling winnings are not taxed in the UK when they come from UK-based sources. However, in this situation, the platform was not UK-licensed and the funds were transferred through PayPal from outside the UK. I’m not sure if that makes a difference in the eyes of HMRC.

I checked the information at https://www.gov.uk/apply-tax-free-interest-on-savings, but most of what I found relates to interest, savings, or foreign income. I could not find anything that directly addresses gambling winnings from international websites.

In an attempt to get more clarity, I also reached out to a few of the sites I used. I found most of their contact information through somagyarkaszino.com, which provides listings and links for different operators. I asked whether they send any reports to tax authorities or provide annual statements to players. Only a few responded, and their replies were quite vague. Most of them said it is the player’s own responsibility to follow their country’s tax laws and recommended contacting HMRC for guidance.

At this point, I have the funds sitting in PayPal, but I’m not sure what the next step should be. Do I need to report it now? Should I wait until the money is moved into my bank account? Or is it not considered taxable at all?

la531983

Most UK bookmakers arent actually UK bookmakers, they are in places like Gibraltar, Malta etc. Sure this is no different.

masonic

Enjoy your winnings. I'm reasonably confident the taxman does not get to take a bite.

aroominyork

There is no tax on UK gambling winnings. It's the bookies/gambling companies who HMRC taxes. I cannot imagine overseas winnings are treated differently. 

Who remembers when there was tax on gambling, when you were in the bookies and could choose to add 10% tax to your stake, or pay no tax on your stake but 10% on the whole payout if you won. The good old days!

masonic

aroominyork said:

Who remembers when there was tax on gambling, when you were in the bookies and could choose to add 10% tax to your stake, or pay no tax on your stake but 10% on the whole payout if you won. The good old days!

Not me, but given the magnitude of other 'sin' taxes levied on those who partake, gambling does seem to stick out.

Slinky

aroominyork said:

Who remembers when there was tax on gambling, when you were in the bookies and could choose to add 10% tax to your stake, or pay no tax on your stake but 10% on the whole payout if you won. The good old days!

Yes I remember that, not that I was ever much of a gambler

aroominyork

Maybe the difference is that smoking, drinking etc. is a public health issue, so there is a double tax win of not only raising revenue but also reducing their use which is a drain on the NHS and wider economy. With gambling, where punters want to feel they can beat the bookie, the 10% tax was seen as threatening bookies’ survival. However, it probably just gave the bookies leeway to offer worse odds so that punters had the same win odds while bookies doubled their profits. Given how gambling has exploded as an epidemic during the last decade or so, with 50% adverts saying “please gamble” and the other 50% saying “but don’t gamble too much”, it’s also now become a public health issue.

Albermarle

aroominyork said:

There is no tax on UK gambling winnings. It's the bookies/gambling companies who HMRC taxes. I cannot imagine overseas winnings are treated differently. 

Who remembers when there was tax on gambling, when you were in the bookies and could choose to add 10% tax to your stake, or pay no tax on your stake but 10% on the whole payout if you won. The good old days!

That was when probably 90% of gambling turnover was on horse/greyhound racing. It was also an incentive to attend the race meetings in person as the tax did not apply on course.

Albermarle

masonic said:

aroominyork said:

Who remembers when there was tax on gambling, when you were in the bookies and could choose to add 10% tax to your stake, or pay no tax on your stake but 10% on the whole payout if you won. The good old days!

Not me, but given the magnitude of other 'sin' taxes levied on those who partake, gambling does seem to stick out.

Just for info. 

The UK government has announced plans to combine existing gambling taxes into a single Remote Betting and Gaming Duty (RBGD).  

Under current rules, operators on a list of UK online casinos are subject to a 21% Remote Gaming Duty, while betting firms pay significantly less through General Betting Duty and Pool Betting Duty, both of which are 15%. The proposed consolidation threatens to eliminate this distinction and potentially raise tax burdens on betting companies to match the higher 21% rate that casino operators already pay. 

The Betting and Gaming Council (BGC), which represents regulated gambling businesses in Britain, has strongly opposed the proposed changes. Their primary concern is horse racing, which is heavily funded by betting operators through sponsorships, media rights payments, and the Horserace Betting Levy. The BGC claims that increased tax pressure will force betting companies to reduce their financial support for the sport, and jeopardise its long-term viability . There are nearly 100,000 people employed in the British horse racing industry which could be at risk.