Online Gambling Firms to Pay 15% Tax in UK

Source (posted August 16th):
http://news.sky.com/story/1129538/online-gambling-firms-to-pay-15-percent-tax-in-uk
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The United Kingdom’s government has taken a step towards greater revenue by placing a 15% tax on any offshore gambling firm/website that is used by UK residents. This tax has been used to target companies that establish their bases in tax havens, yet continue to offer services to citizens of the UK. This tax is not a severe penalty on them, it is simply a way to put them on equal tax status with companies that are based in the UK.

This tax will come into play from December 2014, and it will be enforced in the strictest manner possible. The UK treasury secretary had this to say about the matter:

Online Gambling Firms to Pay 15% Tax in UK“It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen. These reforms will ensure that remote operators who have UK clients will make a fair contribution to our finances.”

This tax will apply to companies such as Ladbrokes, Bwin.party, William Hill, Betfair, and a few others. These are companies that were created in the UK, and mainly target UK customers. However, they have all based their operations in Gibralter, where they only have to pay a 1% tax.

There is no reason to suggest that this matter is done and dusted. There is a feeling that companies will react in a negative manner, and challenge the taxes as far as they can. William Hill believes that the tax may be breaking EU competition laws, and there is data to suggest they have a good case.

This situation has brought up the age old debate between gambling operators and the government. In many ways, the UK is a gambling website paradise, with no restrictions on the type of gambling that can take place. Contrast that with the United States, where huge restrictions are placed. The government does not want to put an end, or any limits, on gambling websites. They simply want a fair share of taxes to be paid by UK companies that are moving offshore to increase their already huge profits.

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