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FAST MOVE ON UK OFFSHORE INTERNET GAMBLING TAX

Monday July 18, 2011 : Parliamentary announcement squeezed into Monday's House of Commons schedule
 
The UK government appears to be moving quickly on its previously announced intention to impose secondary licensing - and taxation - on offshore internet gambling companies accessing the British market.
 
According to reports in The Guardian newspaper over the weekend, a slot for an announcement on the tax implications has been squeezed into the House of Commons schedule for Monday, and whilst he is not expected to delve into too much detail, it is anticipated that Chancellor of the Exchequer,  George Osborne, will start the ball rolling on a process leading to formal regulations and tax plans.
 
The British parliament is about to adjourn for its summer recess.
 
Offshore operators pay no UK tax, while onshore gambling companies pay 15 percent gross profits tax plus corporation tax
 
Last week a minister in the DCMS, John Penrose, announced that every betting company offering wagers to British punters will have to obtain a UK licence – news that was widely seen as a precursor to the UK beginning to tax offshore operators.
 
One industry observer noted: "The statement will mean that this will be part of Treasury legislation. There is going to have to be a level of consultation in all of this."
 
The Guardian opines that there are a range of new taxation options open to the Treasury, which include simply imposing the 15 percent rate on offshore operators dealing with UK punters.
 
However, the leading high-street bookmakers are almost certain to lobby for a drop in the gross profits tax to about 10 percent, arguing that the duty would also catch rivals who currently pay nothing. One unnamed top high-street betting chain told the newspaper privately that such a regime could see it return its offshore internet operations to the UK.



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