TaxCorporate TaxGovernment bid to attract online gaming hits hurdles

Government bid to attract online gaming hits hurdles

Sticking point over tax rate severely affects plans to lure gambling companies to British shores before Gambling Act becomes law

A government initiative to draw online gambling companies to pay tax in
Britain has been plagued by serious difficulties.

At a briefing last week, Treasury minister
John
Healey
told tourism industry leaders that the government was yet to
establish a rate of tax that would prompt an influx of gambling companies from
the offshore locations they currently occupy. The benefits for new gaming firms
would be an endorsement from the
Gambling
Commission
, the industry watchdog.

The Treasury department has until next year to devise a formula before the
Gambling Act comes into force, but companies maintain they save significant
amounts of money by not having to pay corporation tax and VAT from bases like
Gibraltar and Malta.

An alternative deal suggested by Ladbrokes would see gambling companies pay a
proportion of turnover into a fund set aside for the treatment of gambling
addicts in return for the kitemark.

John Reilly head of
Ladbrokes
internet division told The Observer: ‘The UK has a reputation for being
really well regulated not just in gambling but in financial services and other
sectors. A kitemark is a benefit I would want to pay for.’

Related links:

World Gaming falls victim to crackdown

Online gaming auditors on red alert over travel to US

Gibraltar decision a relief for online
gaming firms

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