Legislation

UK – UK to tax online at ‘place of consumption’

By Phil - 23 August 2013

The British government has confirmed that taxation for online betting companies will focus on ‘place of consumption’ rather than on a ‘place of supply’ basis meaning offshore operators will now be subjected to the same 15 per cent tax rate as companies based in the UK.

The decision to switch to taxing based on where customers are based rather than where the operator is registered will affect big names such as Ladbrokes, Bwin.party, William Hill and Betfair all of who have internet operations registered in Gibraltar, which offers a much better tax regime.

The Gambling Commission pitches the UK remote gambling market to be worth around US$ 3.1bn per year. The new legislation will generate around US$ 469.1m per year in additional tax revenues.

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.”

The changes will come into play on December 1 2014.

Clive Hawkswood, CEO of the Remote Gambling Association said: “We knew it was coming. The focus for us now is on trying to get the actual rate of the tax reduced.”

William Hill has previously said it would contest the change on the grounds that it breaks European Union competition legislation.