CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Report Criticizes UK Gambling Tax Proposals

Report Criticizes UK Gambling Tax Proposals

by Jason Gorringe, Tax-News.com, London

10 January 2012


UK government proposals to tax gambling operators on a point-of-consumption basis to boost revenues and enhance UK oversight of gambling operators could be self-defeating, according to a new report compiled by Deloitte on behalf of UK bookmarker William Hill.

The report, obtained by The Telegraph, warns that the tax proposals - aimed at levelling the playing field between domestic operators and operators located offshore - could backfire as gamblers move their business away from legitimate operators to the lightly-regulated 'grey market'.

The government has proposed to review the UK's regime so that offshore operators would be required to obtain a license from the UK regulator in order to transact with UK clients. The Treasury is also reviewing the case for changing the taxation regime in line with these proposals and taxing operators on the basis of customer location.

The study warns that if the new regime is introduced, it could have the unintended consequence of boosting the market share of the 'grey market'. It finds that a 10% tax would boost grey market revenues by about 27%, rising to 40% if a 15% tax were introduced.

Presently gambling operators in the UK are required to pay gross profits tax at 15% but under the proposals this tax could be reduced and offshore operators would newly be required to contribute to UK coffers. In recent years, operators have increasingly looked to specialist, low-tax territories, such Gibraltar and the Isle of Man, to relocate operations, where operators benefit from substantially more favourable tax treatment with profits subject to tax as low as 0%.

Deloitte has estimated that the revision of the UK tax regime under a 15% rate would provide just GBP116m (USD179m) in revenues after taking into account an associated fall in corporate tax receipts. This tax benefit should be weighed against the backdrop of a stronger grey market, the study says.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: Isle of Man | tax | business | Gibraltar | United Kingdom | offshore | gambling | offshore e-gaming | services

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »