The UK’s Treasury and HM Revenue and Customs (HMRC) have opened a joint consultation period to invite views on the idea of a single tax rate for online operators.
Under the current regulations, the tax system is structured so that general betting, pool betting and online casino are recognised as three separate entities subjected to different tax rates.
While pools and general betting (online sports betting) is taxed at 15% on all gross gaming revenue, online casino operators face a 21% tax rate.
Historically, that difference has been attributed to a balance by the government, taking into account the impact on each sector, as well raising revenue and responding to regulatory change.
Following a review of that balance, the government has outlined that there are enough similarities between all forms of online gambling that there is “no longer a strong rationale” to not have a single tax rate.
However, the Treasury and HMRC has noted that as the online betting market has “matured”, the contrasting tax rates are “less reflective of real-life distinctions in customer experience of the products”.
The update details: “Remote gambling products have common characteristics that reflect the technology that delivers them, in most cases the internet. Customers engage with both remote betting and remote gaming in similar ways.”
As per the update, the government is mulling over whether to establish a single gambling tax, called the Remote Betting & Gaming Duty (RBGD).
Online casino, bingo, sports and pools betting would all fall under the scope of the RBGD, though the consultation period has been launched to invite feedback from industry stakeholders on how the proposal would work in practice.
The government has outlined its reasons behind launching the consultation, detailing three key aims that include ensuring the rate of tax for remote gambling operators is “appropriate to the industry”, as well as simplifying the system and reducing “administrative burdens”.
Currently, an operator that offers remote sports betting, pool betting and online casino must adhere to three different sets of tax rules for each vertical.
For each segment, they must submit three separate tax returns. This would change under the proposed RBGD, which would require operators to report all relevant divisions under one single registration.
The government said that around 50% of overseas online operators and around 25% of all online operators are currently registed for more than one of the three taxes.
Remote gambling tax has not been raised since 2019, when it was increased from 15% to its current rate of 21%.
However, the consultation document has given no indication of what the new combined rate would manifest as.
Instead, if the government opts to progress the RBGD, the rate of tax will be set as part of the budget process.
The consultation period is open as of today, 28 April, and is expected to run until 21 July.
Should the government approve the proposal, it is expected that the new single tax would come into effect in October 2027.
It was noted that tax changes for land-based operations would not be required.
James Murray MP, exchequer secretary to the Treasury, said: “The tax system needs to keep pace with the developments and innovation that have seen the UK-facing remote gambling sector change significantly in recent years.
“Since remote gambling was first developed it has grown exponentially; the three-tax system needs to adapt to reflect the dynamic and expanding nature of the sector.
“The time has come to consider moving to a single tax for UK-facing remote gambling. A single duty will provide tax certainty and increase simplification for remote gambling.”
He continued, shedding light on the aims of the consultation period and the potential impact of the RBGD, noting: “The proposals we are setting out today on the framework, scope, and administration of a single RBGD will create a simpler, streamlined system that is easier for operators to navigate.
“We are launching this consultation to allow stakeholders to let us know how these reforms can best meet our objectives of simplifying the tax system and reducing administrative burdens.”
In October of last year, the government opted against announcing an increase in duty paid by licensed operators as part of Labour’s first Budget since coming into power.
Instead, the Chancellor Rachel Reeves outlined plans for the consultation period on scrapping the three-tier system currently in place in favour of a single tax, as it looks to “simplify, future-proof and close loopholes in the system”.
Such a consultation was already earmarked by the previous Conservative government and then-Chancellor Jeremy Hunt.
In the lead up to the Budget, The Guardian had announced the government was consulting proposals from the Social Market Foundation which proposed doubling the 21% online casino tax to 42%.
The report sent listed companies’ shares sliding at the time.
The post UK government proposes a single remote gambling tax in new consultation first appeared on EGR Intel.
Three-tier system currently in place could be scrapped by October 2027 pending feedback from industry stakeholders, as the state looks to “simplify” online tax framework
The post UK government proposes a single remote gambling tax in new consultation first appeared on EGR Intel.