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United Kingdom: UK Tackles Gaming Tax Avoidance

20 August 2013   (0 Comments)
Posted by: Author: Robert Lee
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Author: Robert Lee

The UK Government has set out proposals to ensure that remote gambling operators can no longer avoid paying UK taxes by basing themselves offshore.

From December 1, 2014, new rules and sanctions will mean that remote gambling operators will have to pay tax on any gambling profits derived from UK customers. They 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 these taxes are charged at 15 percent.

The Government announced last year that it intended to tax remote gambling on a "place of consumption" basis. A consultation was run from April-June, 2012, and a summary of the responses received has now been released alongside the Government's plans.

Two major concerns were raised by respondents, relating to the proposed definition of a "UK customer," and the means with which the Government hoped to enforce the changes.

The summary document states that, "in light of the preference of the majority of consultation responses, the Government has decided that for the purposes of remote gambling the definition of UK customers will be based on where the customer actually lives." As a result, remote gambling undertaken by a UK resident on holiday will attract UK tax if that gambling could also have been accessed from the UK. On the other hand, no tax will be levied on any remote gambling carried out in the UK by a non-UK resident temporarily in the country.

Failure to comply with the accompanying enforcement regime could result in unlimited fines, the loss of a remote gambling operator's licence, and a seven year spell in prison. HM Revenue and Customs (HMRC) will work with other tax jurisdictions to recover any outstanding tax debt. In the case of operators based in jurisdictions with which the UK does not have a reliable debt collection and assistance agreement, the operator will have to appoint either a joint and severally liable fiscal representative, or an administrative representative. Operators with a poor compliance history will need to provide HMRC with a security.

The Gambling Commission estimates that the UK remote gambling market is worth over GBP2bn (USD3.1bn) a year. The Government anticipates that these changes will generate around GBP300m in additional tax revenues annually.

Commenting on the reforms, Sajid Javid, the Economic Secretary to the Treasury, 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."


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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