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UK may lower down taxes on Gaming operators

The UK may introduce a new bill for reducing tax rate levels on online gambling sites operating in the UK, as a way to attract international companies and former UK ones back to British soil. However, some members of parliament are not so keen on the measure.

Back in 2011, the UK passed on a critical policy to increase tax rates up to 15% on online wagering sites, creating a massive exile of companies who decided to leave the UK towards more tax-friendly offshore paradises, namely Malta and Curaçao.

The British department of Media, Culture and Sports announced their plans to organize a rendez-vous to set a lower tax level on offshore online operators, hence inviting foreign gambling companies to settle their HQs in the UK.

The possible tax reduction comes after the recent financial tax scandals in the UK, where major size companies as Starbucks, Google and Amazon have avoided tax revenue payments for years. The UK government has been heavily criticized for being unable to efficiently regulate tax collection, blaming the high taxation level which forces companies to flee out of the country, or to find different ways to
trick down the system.

According to the UK’s Treasury, roughly 18% of the total UK wagering revenues come from online betting companies (approx. £1.7 billion per year). This number is supposed to be higher if we include non-licensed sites outside the UK jurisdiction.

A low taxation bill would seek to cut down the imposition level by a third, but will also force offshoren betting sites to get a UK license if they wish to continue offering services to UK customers.

A North Yorkshire Member of Parliament (MP) Anne McIntosh supported the new bill, additionally proposing that the new tax imposition on offshore online gambling operators shall be used to support the UK horserace betting industry.

Mrs. McIntosh pointed out that:

At the moment, a number of large bookmakers are located overseas and, therefore, are not subject to tax and Levy contributions. A large number of people’s livelihoods depend on the industry [UK’s Horserace Betting industry] – particularly in my constituency.

The UK Gambling Committee has been optimistic about securing internal gambling laws but is also seeking to increase the number of online operators entering the British market. Both the House of Lords and the House of Commons will meet to discuss changes to the gambling legislation and to finally set a tax percentage for offshore online casinos.

The website Casino Magasinet informs that the recent rise of online casino profits in the UK has made local authorities look beyond the previous tax levels and search for ways to reduce the percentage, thus promoting foreign online casino corporations to once again settle in the UK.

The London Stock Exchange reports that William Hill, UK’s biggest online and land-based casino operator, has had a 27% revenue increase in online betting since 2011. This year, the company has already reached a 20% increase when compared to the same period in 2012.

Notwithstanding, some members of parliament would actually like to increase this tax level to reach an annual £200 million from gambling tax revenues. This position has brought upon much discontent from lawyers, stating that this measure would go against the EU gambling laws. So far, no legal step has been taken on this proposal.

This was posted in Bdaily's Members' News section by Katherine Brown .