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UK £300m Gambling Tax on foreign operators 1 Dec 2015

  • Nov 1, 2014 | Richard Asquith

UK £300m Gambling Tax on foreign operators 1 Dec 2015

The UK HMRC has started to accept UK Gambling Tax registrations from foreign providers for the first time. This new policy will require offshore providers of betting and related gambling services to pay 15% on fees to UK resident customers.  This will put offshore gambling companies on the same tax footing as premises-based betting shops and similar premises in the UK.

The UK's HMRC estimates that it will raise £300 million per annum.

Change in place of supply rules

The new rules will apply to the General Betting Duty, Pool Betting Duty, and Remote Gaming Duty.

The new regime is based on changes in the ‘place of supply’ rules for remote gambling and betting, which means tax is due where the gambler is ordinarily resident. This applies in the UK from 1 December 2014. There will be a new gambling tax registration filings website. Online registration applies to all operators who hold a UK Gambling Commission license for UK consumers. Failure to register with HMRC by 1 December may result in the loss of the operator’s license, and potentially unlimited fines.

The new measure will draw in gambling operators from around the world, but it is especially targeted at offshore centres such as Gibraltar.

This is an important measure to create a level playing field for UK gambling firms which have been losing out to the offshore providers. The new tax registration regime has been severely delayed, and operators will be pushed to meet the 1 December deadline. At best, the approval will take four weeks from the opening of the portal.

Gambling in the UK is VAT exempt

Generally, betting based on games of chance is exempt from UK VAT.  This includes pool betting, bingo and the National Lottery.  Services around betting, including admission to premises, membership fees and food & drink is not exempt.  Games involving judgement, or the selection of prize winners by a panel of judges, are standard VAT rated.

Instead, licensed providers of betting services are subject to the various betting taxes, generally around 15% of fee/takings.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.