New rules for some Gambling Duties from 1 December 2014
From 1 December 2014, HM Revenue & Customs (HMRC) is changing the rules for Remote Gaming Duty (RGD), General Betting Duty (GBD) and Pool Betting Duty (PBD):
- RGD applies to remote gambling, for example casinos and bingo played through the internet
- GBD covers more general betting such as fixed-odds betting and pool bets on horse and dog racing
- PBD applies to pool betting (other than on horse and dog racing) and non fixed-odds betting
Premises based betting and the treatment of spread betting will be unaffected except for some administrative changes.
The new rules will affect:
- the remote gambling industry who offer remote betting and gaming to UK consumers from outside the UK
- UK land based betting business such as high street betting shops
Land based gaming sector businesses such as casinos and bingo halls will not be affected by these new rules unless they offer remote betting or gaming.
Getting ready for the changes
If you are a gambling operator you are advised to make sure that everyone in your organisation who needs to know about the changes is kept informed and in-house systems and procedures are reviewed accordingly.
New Gambling Tax (GT) online service for RGD, GBD and PBD
To support you with the changes, HMRC is introducing a new online service.
You, your agent or other representatives will be able to use the GT online service to:
- register your business or group for RGD, GBD and PBD
- make changes to your registration details – for example your contact address
- deregister
- submit returns and payments
The current tax rules for RGD, GBD and PBD
Under the current tax rules, gambling activities are taxed on a ‘place of supply’ basis. This means that if you are supplying gaming from the UK, you pay tax on all of your gross gambling profits, while operators supplying UK customers from outside the UK pay no UK gambling taxes.
There will be no change to the way that GBD is calculated on spread betting receipts, although quarterly rather than monthly returns will be required. However, spread betting operators will be able to use the GT online Service.
New tax rules for RGD, GBD and PBD from 1 December 2014
HMRC is changing the basis of how these duties are taxed from ‘place of supply’ to ‘place of consumption’. This means that you will become liable to one or more tax (RGD, GBD or PBD), if you offer remote gambling to a person who usually lives in the UK. This applies no matter where in the world you are based, as long as the gambling can be accessed from the UK.
If you supply remote gambling to UK customers from outside the UK you will become liable to a UK gambling tax for the first time and RGD, GBD, or PBD will become payable. UK based operators who supply remote gambling to customers who do not usually live in the UK will no longer be liable to RGD, GBD or PBD on those transactions.
If you hold a Remote Operating Licence (ROL) from the Gambling Commission (GC) you must register for the appropriate tax and submit returns online. Any gambling operators who offer remote gambling to UK customers will have to build verification checks into their customer handling processes if the customer gives an address outside the UK. For the purposes of remote gambling the definition of a UK person is someone who usually lives in the UK.
Customer verification checks
You should obtain a declaration from each gambler which shows the address at which the gambler usually lives before accepting bets. If no declaration is received the customer will be determined as being a UK person. You should also carry out verification checks on the information provided if a customer gives an address outside the UK. These procedures must be built into any customer handling processes.
What to do if you become liable to gambling duty from 1 December 2014
If you become liable to one or more of the gambling duties (RGD, GBD, or PBD) under the new rules, you must register for the appropriate duty, submit returns and pay any tax due in sterling.
If you will be required to hold a ROL from the GC, you must register and submit returns online. If you don’t have to operate under a ROL you can register and submit returns on paper, however HMRC recommends that you use the online service.
When and how to register under the new rules
If you will become liable to one of the gambling duties you must register by 1 December 2014. The GT online service for registration will open in early autumn 2014, giving you plenty of time to register before the 1 December 2014 deadline.
Remote gambling operators outside the EU
You may be required to appoint fiscal and administrative representatives if you are a remote gambling operator based in a country outside the EU and:
- the UK does not have an appropriate debt collection and assistance agreement with the country
- you are not part of a group registration with a UK-based operator
Any fiscal and administrative representatives will need to be established in the UK and to be agreed by HMRC.
Returns and payments for RGD, GBD and PBD
If you are registered for RGD, GBD or PBD you will need to submit four returns each year. Returns and payments (in sterling) are due by the 30th day following the end of the accounting period.
Enforcement of the new rules
The new rules will be supported by enforcement measures, including, unlimited fines or the loss of a ROL issued by the GC.
Remote Operating Licence (ROL)
Reforms are in progress such that a ROL from the UK Gambling Commission (GC) will be required where at least one piece of remote gambling equipment used to provide remote gambling is situated in Great Britain, or where there is no such equipment in GB but the facilities can be used from there. Only those holding a GC ROL will be able to supply or advertise remote gambling facilities to customers in GB.
Services offered by RKG Consulting
RKG Consulting, based in Piccadilly Circus central London, can assist your organisation by:
- Obtaining the necessary Remote Operating Licence from the GC for you;
2. Registering your organisation for Remote Gaming Duty with HMRC.
3. Preparation and filing of the RGD returns and payments with HMRC on a quarterly basis.
4. Compliance with HMRC and GC regulations and audits.
We may also be able to assist with customer verification checks as part of an outsourced package of services. For further details and information please call us on +44 207 839 0389 / 4731 or email: rganguly@rkgconsulting.com. For further information we have added the articles below.
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