Gambling tax crackdown unsurprising as HMRC “sin tax” receipts continue to fall – now just 2.8% of total tax revenues

Rachel Reeves’ crackdown on gambling is unsurprising, as receipts from so-called ‘sin taxes’ have dropped to just 2.8% of total HMRC revenues in the tax year 2024/25, down from 4.3% in 2015/16, says UHY Hacker Young.

Sandra Jeevan, Partner and head of private client and trust at UHY Hacker Young, says: “The Government’s decision to raise gambling taxes is unsurprising given the sharp decline in ‘sin taxes’ as a share of total revenues over the past decade.”

“With tobacco and alcohol consumption falling, gambling has become one of the few remaining areas where the Treasury can generate significant income.”

“These changes will put pressure on operators’ margins and could accelerate consolidation in the sector, as smaller firms struggle to absorb the cost.”

“For consumers, the impact is likely to be felt through higher prices or reduced promotions, and there’s a risk that some may turn to offshore platforms if UK operators pass on the tax burden.”

Tax receipts from betting and gaming increased 7% in the last year to £3.6bn, up from £3.4bn in the tax year 2023/24*.

The so-called ‘sin taxes’ cover tobacco, alcohol and betting and gaming. The changes raise remote gaming duty from 21% to 40% and online gambling duty from 15% to 25%. Together, these changes are expected to raise £1.1bn by 2031.

Taxes from ‘sin taxes’ now at their lowest level in ten years – percentage of overall tax revenues that are sin taxes

* In 2024/25 the so-called “sin taxes” raised £24.2bn out of total receipts of £858.9bn (2.8%), compared with £22.8bn out of £532.5bn in 2015/16 (4.3%). The decline from 4.3% to 2.8% is about a third in relative terms. Source: HMRC.