UK Online Gambling Taxes Raised

Published: August 24, 2013

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This week news broke concerning tax fees and online gambling regulation in the united Kingdom. The UK's authorities have just announced they will be applying a 15 percent tax rate to all offshore online gambling companies offering their services to UK players within the UK's jurisdiction in the near future. The tax is deemed a consumption tax and it is expected to raise about £300 million in taxes for the Government. The Government said the new tax reform will be confirmed in its budget statement in March 2014.

The new tax law will be applied on December, 2014 and it stipulates online gambling companies to be taxed in accordance to where their customers are located rather than where the company is based. Most big online gambling companies operating in the United Kingdom are based in Gibraltar and other tax havens. The list includes William Hill, Ladbrokes, Bwin, and Betfair, among others, and they will all be paying 15% tax to the UK government for every British player wagering with them.

In a public statement the Economic Secretary to the Treasury of the United Kingdom, 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." He also believes that the new tax reform will ensure that online gambling operators who are benefiting from money earned in Britain will also be making a fair contribution to the country's public finances.

Online gambling operators based in Gibraltar currently pay 1 percent taxes up to £425,000, the British reform that will be enforced on them will make them pay 15 percent, which is the same amount that local online gambling companies pay. A lot of the companies we listed above, and many more, will suffer from the higher tax rates; they are certainly not happy with the new regulation as they have already threatened to challenge the laws because they consider them to breach the competition law in the European Union.

We will keep you updated on whether the British Government puts its foot down, or if the companies will manage to raise a valid case against the tax reform. Do you think it is fair that offshore companies are taxed like local companies? What is your opinion on tax havens? Let us hear your thoughts as this case develops.


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