When George Osborne announced that online and bingo operators would no longer be exempt from the 15% taxation on free and discounted online sports bet, the industry was very nearly in an uproar. That was back in March and in the meantime a lot of online casino operators had a few choice things to contribute to the topic.
One of the bigger issues was the fact that this added 15% general betting duty was to be imposed on top of the 15% online point of consumption tax that had been levied in 2014.
Thankfully the HMRC had been open to consultation and with 10 responses from online operators, three from tax representatives or advisors as well as one from the Remote Gambling Association (RGA), the planned legislation has been amended.
It seems to have been accepted now that the tax burden on operators would be unacceptably high if this measure would be implemented. The market would not only be damaged severely for existing operators, but new market entrants would see less or perhaps no growth at all. Considering the size of the UK gambling market, the amount of revenue earned from taxes, it seems the arguments were compelling enough for the legislation to be amended.
The HMRC consequently issued the following statement: “This measure is intended to bring the tax treatment of freeplays for remote gaming more into line with the treatment for free bets under GBD.
“The costing includes a behavioural effect to account for a change in the marketing strategy of affected operators as well as the potential for firms finding ways to mitigate the impacts of the measure.”
No concessions were made as to when the changes are supposed to take effect. Operators had hoped to push back on the August 2017 delivery, considering it too soon, but the HMRC would not budge on that point and believes the time frame reasonable for the changes to be accommodated.
One has to be thankful for small favours.