UK Gambling Tax Regime Rules Overhauled
New rules for the UK’s General Betting Duty (GBD), Pool Betting Duty (PBD), and Remote Gambling Duty (RGD) entered into force on December 1, 2014, shifting the place of supply for tax purposes from the place of supply to the place of consumption.
The reforms affect those businesses providing remote betting and gaming to UK consumers from outside the UK, and UK land-based betting businesses, such as high-street betting shops. Land-based gaming sector businesses, such as casinos and bingo halls, are only affected if they offer remote betting or gaming. Those providing premises-based betting and spread betting are largely unaffected, except for some administrative changes.
The change is intended to level the playing field between UK operators, which were subject to tax on all gross gambling profits and also the UK horseracing levy, and overseas operators, who paid no UK gambling taxes.
As a result of the change, anyone who offers remote gambling to a person who usually lives in the UK (a “UK person” under the regulations) will be newly liable to one or more of the relevant taxes (GBD, PBD, or RGD). The change applies regardless of where the supplier is based. Anyone who supplies remote gambling to UK customers from outside the UK will be liable to UK gambling tax for the first time, while UK-based operators who supply remote gambling to customers who do not usually live in the UK are no longer liable to GBD, PBD, or RGD on those transactions.
HMRC is moving to an online registration and return system for these taxes as part of the change. The Department will only issue paper forms for registration and returns if the business in question does not hold – and is not required to hold – a Remote Operating Licence (ROL) from the Gambling Commission. Anyone who offers remote gambling to UK customers will need to be able to establish which of their customers are “UK people.”
The accounting periods for GBD and PBD returns have changed from monthly to quarterly. RGD accounting periods are already quarterly. There is no change to the way GBD is calculated on spread betting receipts, but quarterly – rather than monthly – returns will be required.
GBD is charged on a bookmaker’s profits on specified bets, while PBD is charged on a bookmaker’s profits from non-fixed odd bets and are not on horse or dog racing, subject to certain conditions. RGD is charged on a gaming provider’s profits from remote gaming played by a UK person.
