Gambling tax more complicated than ever

Barney Horn, indirect tax partner in the Deloitte betting and gaming group, has said that the Treasury has made gambling taxation more complicated than ever despite a trend for simplification.

He explained: “Overall, while there has been much talk of simplifying taxes, the position has become increasingly complex with rates for seemingly similar gambling experiences being taxed at different rates. As an example, once the changes have gone through, duty on roulette will be charged at 15% if played on-line, 25% if played on a FOBT and between 15% and 50% if played in a casino depending on the gaming turnover of the casino. All land-based gambling businesses also pay a significant amount of VAT which they cannot recover.”

While Chancellor George Osborne has cut bingo tax (in half to 10%), the increase of MGD for LBO gaming machines to 25% has more than balanced it out. Horn commented: “This will lead to a significant cost to betting shop operators estimated by the Government to be £75-£90m per annum once the change is introduced.”

Ladbrokes’ Ciaran O’Brien warned that something could give: “The pips are squeaking – bookmaking is an overtaxed industry already and this increase adds £75m to the tax bill of £1 billion already paid by the industry.”

Horn added that the Chancellor’s announcements that the 15% place of consumption (POC) tax will come in with effect from 1 December 2014 will have understandable huge implications for the online betting and gaming sector.

He explained: “To a certain extent the proposal simplifies the existing rules and ensures all gambling by UK consumers is subject to UK tax, regardless of the operator’s location. However, it will increase operating costs and could lead to further consolidation in the market. Online gambling operators are unlikely to be able to pass on the costs to consumers, but could be forced to cut back on marketing and player promotions. The Chancellor also confirmed the Government will consult on extending the horserace betting levy (currently 10.75%) to offshore bookmakers adding another significant cost to offshore operators receiving bets on UK races.”




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