Brexit & EconomyPoliticsWorth a punt

Worth a punt

The Government must act to attract online gaming businesses

In its 2005 pre-Budget report the Treasury said the 2006 Budget would
announce rates of tax for remote gaming businesses that become UK licensed.

Not only did the 2006 Budget pass by with no mention of these rates but the
recent PBR also slipped by in silence on the matter.

This is a massive concern for those offshore gaming businesses currently
considering UK licensing for their remote gaming businesses.

As things stand, the benefits – and sanctions – under the Gambling Act 2005
are about to take full effect, yet businesses are still not able to properly
model the tax cost to their business of becoming UK licensed.

The government has stated that its aim is to create a regulatory framework
which will make the UK the licensing jurisdiction of choice for the remote
gaming sector.

We urge the Treasury to further consult with businesses and their advisers,
and take this opportunity to ensure that the UK tax environment, including
gaming duty, corporate tax and VAT, supports this aim.

Creating an attractive tax environment for remote gaming groups could prove
to be an incredibly important turning point for the UK economy.

E-commerce is now growing and developing at an exponential rate and remote
gaming business is, in a number of areas, leading this development.

If the government can get this right for remote gaming, it would put the UK
in pole position to attract other global e-commerce businesses.

Both industry and government agree that e-commerce will continue to grow
rapidly. It is estimated that the value of UK online spending in December alone
was in the region of £3.7bn – a 45% increase on December 2005. Such a
significant and growing field of business demands a globally competitive tax
regime.

We are currently seeing companies with more ‘traditional’ business models
basing their headquarters away from the UK, citing tax complexity and a higher
tax burden (Google and Kraft to name two).

For online businesses that can be more flexible with their location, the lure
of credible regulation must go hand in hand with an internationally competitive
tax regime.

Without this, not only will gaming companies come to the UK, but related
sports betting businesses, currently based in the UK, will migrate overseas.

Paul Eagland is head of tax at BDO Stoy Hayward

Related Articles

5 key takeaways from Theresa May’s Florence speech

Brexit 5 key takeaways from Theresa May’s Florence speech

3m Alia Shoaib, Reporter
UK at risk of Brexit talent brain-drain

People Practice UK at risk of Brexit talent brain-drain

4m Alia Shoaib, Reporter
Brexit essentials: this week's round-up

Politics Brexit essentials: this week's round-up

4m Alia Shoaib, Reporter
Government publishes post-Brexit customs arrangements policy paper

Politics Government publishes post-Brexit customs arrangements policy paper

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Increased government spending partly offset by high tax revenue

Governance Increased government spending partly offset by high tax revenue

5m Alia Shoaib, Reporter
Less than a third of UK businesses have made formal Brexit plans

Politics Less than a third of UK businesses have made formal Brexit plans

5m Alia Shoaib, Reporter
Nicky Morgan elected Chair of the Treasury Committee

Politics Nicky Morgan elected Chair of the Treasury Committee

5m Alia Shoaib, Reporter