Online Gambling Sites Face 300 Million Pound Tax Bill


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Online Gambling Sites Face 300 Million Pound Tax BillStarting December 1st 2014 all online bingo and gambling operators operating offshore will be required to pay a 15% point of consumption tax in the UK. They will pay the 15% tax on gross profits generated by British customers no matter where the gaming companies are located. The Tory government believes the point of consumption tax will bring an extra £300 million to the nation's treasury. The tax will be confirmed when the tory government unveils its budget next March. Sajid Javid, economic secretary to the Treasury, said the changes will "ensure that remote gambling operators who have UK customers make a fair contribution to the public finances."

Many British gaming companies moved to low tax jurisdictions like Malta, Gibraltar, Alderney and others to sidestep high UK taxes. Javid addressed the issue and 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." The move will hit some of the gaming industry's biggest players including Ladbrokes, Bwin.party, William Hill and Betfair. All are based in Gibraltar which has a 1% tax rate and taxes are capped at 425,000 pounds. There is also several online bingo operators located in Gibraltar.

Depending on the type of gambling companies with UK clients will pay a remote gaming duty, general betting duty or pool betting duty. All are taxed at 15%. The UK Gambling Commission has estimated that the UK remote gaming market is worth about £2 billion annually. The new rules will be strictly enforced. New criminal offenses will be created. Failure to comply with the new regime could result in a seven year prison sentence, unlimited fines and the loss of a remote gaming license. The new rules were drawn up after a three month consultation period.

The Daily Mail revealed that Culture Secretary Maria Miller will introduce legislation that will require every gambling website with UK customers to obtain a British betting license. Miller will introduce the bill when Parliament returns to Westminster next month. Clive Hawkswood, head of the Remote Gambling Association told reporters that members of his group had expected the actions by the UK government. He said that "the focus for us now is on trying to get the actual rate of the tax reduced." Gaming operators have until September 20th to comment on the new taxes and regulations. Ralph Topping hinted that a European Commission challenge may be in the works.

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