UK’s 15 Percent Tax on Offshore-Based Remote Gambling Operators to Take Effect in 2014
The UK government’s new tax rule for the online wagering industry has been declared official. Inasmuch as the British government estimates that around 300 million pounds in tax revenues will be collected from the new tax rule, they intend to include the amount in UK’s budget statement for the coming year.
In view of this, the government will carry out its plan of imposing a 15 percent tax starting December 2014, on offshore-based companies offering remote gambling facilities to customers located within UK’s territorial jurisdiction.
The British Treasury Department is standing firm on its decision to take decisive actions against gambling firms that opted to avoid UK taxes by establishing their remote gambling operations in offshore jurisdictions such as Gibraltar, Malta, Alderney and The Isle of Man. After all, online gambling operators in Gibraltar pay only one percent (1%) on gross profit and one percent (1%) of turnover for fixed-odd betting systems. Moreover, both taxes enjoy a cap of £425,000.
This stands in contrast to UK licensed gambling firms that pay annual levies computed at 15 percent tax on gross profits for both land-based and Internet-based wagering operations. Nonetheless, the imposition of the new tax rule denotes that offshore-licensed operators will be paying the same tax rate effective December 2014.
The Chief Executive of the Remote Gambling Association, Clive Hawkswood, disclosed that they intend to focus their actions on “trying to get the actual rate of the tax reduced”, as they were already aware that it was coming.