International edition
September 23, 2021

The proposal would see online betting taxed at the point of consumption

UK budget plans target offshore i-gaming operators

(UK).- Chancellor of the Exchequer, George Osborne, used his budget speech yesterday to announce that the government plans to change some rules on remote gambling. The proposal, which has yet to be fully outlined, would see online betting taxed at the point of consumption rather than at the point of supply as it is at present and is intended to capture duty from offshore operators taking wagers from UK-based punters.

The current duty regime for remote gambling introduced by the last government was levied on a ‘place of supply’ basis,” Osborne told the House of Commons on Wednesday. “This allowed overseas operators to largely avoid it and much of the industry has, as a result, moved offshore. Ninety percent of online gambling consumed by our citizens is now supplied from outside the UK and the remaining UK operations are under pressure to leave.”

“This is clearly not fair and not a sensible way to support jobs in Britain. So, we intend to introduce a tax regime based on the place of consumption, where the customer is based, not the company,” he added.

It is now expected that Her Majesty’s Treasury will shortly begin a consultation period on how to implement Osborne’s plan with the government likely to announce the new rate of remote duty in either the autumn financial statement or next year's budget.

Osborne also used yesterday’s speech to reveal that the government plans to increase the rate of duty charged on machines played in betting shops to 20 percent of net takings. Although higher than studies suggested was necessary for the government to achieve a revenue neutral position, this rate will replace amusement machine licence duty and the value-added tax (VAT) previously paid by betting shop operators.

“The VAT treatment of gaming machines is being repeatedly challenged by operators in the courts,” Osborne stated. “So, I will introduce a new machine games duty with a standard rate of 20 percent and a lower rate for low stakes and prize machines of five percent of net takings.”

Finally, Osborne declared that the government will introduce double taxation relief for remote gambling from next month. “These changes will create a more level playing field and protect jobs here,” said Osborne.

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