UKGC Increase Taxes for Gambling Operators – News Going into 2020…January 31, 2020
The UKGC Increase Taxes for Gambling Operators
There has been news in the past year that will certainly have an effect on the top casinos in the land, as the UK government plans sweeping changes to tax. Will UKGC increase taxes for gambling operators to change their output long-term?
Reports state the news may damage plenty of big hitters in the gaming industry. These new tax laws soon might change the game as we know it. At the end of 2018 during the budget meeting; the treasury’s fiscal planning, backing for commercial duties and monetary policies came to light.
Will this damage casino profits long-term? Overall, reports claim more than £270 million in lost tax revenues over the next four years. This is due to a stake reduction from FOBT, amounting to £2.
Unfortunately, casinos will be hit hard by tax changes as remote gaming duties went up a whopping 6% to 21% total last October 2019. The government needs to make immediate changes, according to the Office of Budget Responsibility.
Impact on Casinos
How will the UKGC increase taxes for gambling operators affect the industry? Simply put, these tax requirements have changed licensed casinos and how they run. If the costs go up further, as a business they will need to find extra money to survive. As far as we know, the government will seek further tax costs in the future years ahead.
Furthermore, there’s been sweeping changes to last year’s 2018/19 Finance Bill. For instance, sector incumbents will not take place at a later date. while losses from one accounting period to another can not be considered. Also, casinos will not be permitted to use accounts to fork up gaming duty charges. HMRC have offered their support on the matter.
There are also changes afoot in the DST (Digital Services Tax) which could hit casinos hard. By April 2020, the government expects to charge more tax on DST’s, according to the Treasury. This will be based on transactions carried out.
Considering a large portion of profits stem from transactions, there’s scope for discussion to reverse this news. Therefore, over the next four years from April, the government plans big changes. They hope to create an extra £1.5 billion during this time.
With UK casino customers, DST will allow a rate of 2% on any profits for casinos. This is based on income in the form of revenue for casinos, making a minimum of £500 million. Roughly £25 million from UK transactions shall commence initially.
However, should a suitable ‘global solution’ come to pass before the date for UKGC Increase Taxes for Gambling Operators, the DST expectations may change. Therefore, it would be in the best interest of casinos for this to happen, should a meeting take place beforehand.
Based on the comments coming from the Budget in 2018, a respected source stated the following:
“If there’s a big change to RGD, we will see how that rise in rates could impact some casinos going forward.”
“Depending on the implementations and planned changes of the DST, which was made public by the Budget, this would not bode well. In particular with the larger casinos impacted by these changes, based on the governments need to increase tax revenues.”
“Should the possible changes made by the government coincide with the date set, it will be intriguing to watch developments together.
“How this impacts a large spectrum of companies with £500m and above in ‘global in-scope revenues’ could be challenging. Considering a meeting can take place in April 2020 to discuss this further, perhaps the added time could benefit all.”