Gambling tax: new rules and sanctions to prevent avoidance by gambling companies

HM Treasury

New proposals for rules and sanctions to ensure that remote gambling operators with UK customers will pay UK gambling taxes from next year, no matter where in the world they are based, have been set out by the government.

The changes, which are due to come into force on 1 December 2014, will mean that all remote gambling companies will be taxed on their gambling profits from UK customers. Currently, remote gambling operators can and do avoid UK taxes by basing themselves offshore. The new rules will create a level playing field across the industry.

The new rules will be supported by tough enforcement measures, including the creation of new criminal offences. Failure to comply with them could result in prison sentences of up to seven years, unlimited fines, or the loss of a remote gambling operator’s licence to operate.

This follows last year’s announcement that the government would move to taxing gambling on a ‘place of consumption’, rather than on a ‘place of supply’ basis, so that all remote gambling by UK customers, generally carried out online or on the telephone, will be taxed in the UK. The new rules and sanctions are the result of the subsequent consultation exploring how the change should be implemented.

The Gambling Commission estimates that the UK remote gambling market is worth over £2 billion per year. The new rules will bring in approximately £300 million per year in additional tax revenues.

Remote gambling operators with UK customers will be liable to pay either remote gaming duty, general betting duty or pool betting duty (depending on the type of gambling offered), all of which are currently at 15%.

The Economic Secretary to the Treasury, Sajid Javid, said: “It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen in the future.

”These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances.”