New Tax Plan For UK-Facing Gambling Operators

15% Tax For Online Gambling Confirmed In UK

Gambling in the United Kingdom is a huge industry to say the least. It is known as the biggest market in the gambling world, a distinction that is strengthen by the many online players that frequent the many companies available over the internet. The regulations certainly allow for the industry to grow but the government is looking to make some changes to the taxes.

A 15% tax on all online betting companies that serve customers from the United Kingdom has recently been confirmed by the UK government and will most likely take effect as of December 1^st, 2014. It is important to point out the fact that this tax is on the gross profits generated from UK customers, regardless of where the operator is located. The UK made a few changes a while back to its online gambling taxes that only applied to the companies that had their headquarters within the country. While some chose to leave in order to avoid these higher taxes, the ones that stayed continued to show good profits.

Point of consumption tax

It is called the point of consumption tax and it is believed by the government that this will generate an additional £300 million from the gambling industry. The economic secretary to the Treasury stated that this change will make sure that remote gambling operators will make a contribution to public finances if they have UK customers.

While it may be surprising to some, this idea was identified as a key point in the new Gambling Bill in United Kingdom about two years ago. The bill is now making its way through the process and is getting closer and closer to becoming a reality. As part of the new legislation, all operators that provide services to UK customers will have to be issued a license by the Gambling Commission in the country. Licenses from other known destinations, such as Isle of Man, Antigua and Gibraltar, will no longer be accepted.

Since some of the industry-leading operators are based in Gibraltar and enjoy a tax rate of just 1%, they have been expecting for the tax axe to come down but consider it is too big. The Remote Gambling Association declared that they are trying to reduce the tax in order to make it easier for companies to make the switch and that the suggested one is below 10%.

More expensive for the players

The problem for the companies is that given the large tax rate, things are very likely to influence the offers available to their customers. The punters will be the ones having to take on the tax increase and this is very likely to encourage them to check out other operators appearing in other parts of the world, like in the Caribbean for example. The goal from the betting companies is to persuade the government to impose a system that would allow operators in the UK to be competitive in their offers with places that have very low taxes.

Since the plan had just been put to ink, the operators will have over a month to comment on the plan, with the window closing on September 30. It remains to be seen how the story will end and how this will affect the customers. The chief executive from William Hill believes that the regulations aim to increase revenue generation for the regulators over better consumer protection, a concept that conflicts with the European Union edicts.

With online gambling continuing to grow every year, more and more operators make their way to the internet and provide better services for the players. The need to constantly stay competitive is very important and a higher tax rate in the biggest online gambling market in the world can cause a lot of problems for many companies.

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