New rules for some Gambling Duties from 1 December 2014

From 1 December 2014, HM Revenue & Customs (HMRC) is changing the rules for Remote Gaming Duty (RGD), General Betting Duty (GBD) and Pool Betting Duty (PBD).
  • RGD applies to remote gambling, for example casinos and bingo played through the internet
  • GBD covers more general betting such as fixed-odds betting and pool bets on horse and dog racing
  • PBD applies to pool betting (other than on horse and dog racing) and non fixed-odds betting
This guide gives a brief overview of the key changes and what you will need to do if the changes affect your business.
Premises based betting and the treatment of spread betting will be unaffected except for some administrative changes.
The new rules don’t start until 1 December 2014, although you may need to carry out some preparation before then.
HMRC will publish full guidance on all aspects of the changes before the rules begin.
You can access the first in a series of Gambling Tax Reform information notes at the end of this article.
The new rules will affect:
  • The remote gambling industry who offer remote betting and gaming to UK consumers from outside the UK
  • UK land based betting business such as high street betting shops
Land based gaming sector businesses such as casinos and bingo halls will not be affected by these new rules unless they offer remote betting or gaming.

Getting ready for the changes

If you are a gambling operator you are advised to make sure that everyone in your organisation who needs to know about the changes is kept informed and in-house systems and procedures are reviewed accordingly.

New Gambling Tax (GT) online service for RGD, GBD and PBD

To support you with the changes, HMRC is introducing a new online service.
You, your agent or other representatives will be able to use the GT online service to:
  • Register your business or group for RGD, GBD and PBD
  • Make changes to your registration details – for example your contact address
  • Deregister
  • Submit returns and payments

The current tax rules for RGD, GBD and PBD

Under the current tax rules, gambling activities are taxed on a ‘place of supply’ basis. This means that if you are supplying gaming from the UK, you pay tax on all of your gross gambling profits, while operators supplying UK customers from outside the UK pay no UK gambling taxes.
There will be no change to the way that GBD is calculated on spread betting receipts, although quarterly rather than monthly returns will be required.  However, spread betting operators will be able to use the GT online Service.

New tax rules for RGD, GBD and PBD from 1 December 2014

HMRC is changing the basis of how these duties are taxed from ‘place of supply’ to ‘place of consumption’. This means that you will become liable to one or more tax (RGD, GBD or PBD), if you offer remote gambling to a person who usually lives in the UK. This applies no matter where in the world you are based, as long as the gambling can be accessed from the UK.
If you supply remote gambling to UK customers from outside the UK you will become liable to a UK gambling tax for the first time and RGD, GBD, or PBD will become payable. UK based operators who supply remote gambling to customers who do not usually live in the UK will no longer be liable to RGD, GBD or PBD on those transactions.
If you hold a Remote Operating Licence (ROL) from the Gambling Commission (GC) you must register for the appropriate tax and submit returns online.
Any gambling operators who offer remote gambling to UK customers will have to build verification checks into their customer handling processes if the customer gives an address outside the UK.
Pool bets on horse or dog racing are currently charged with GBD. This won’t change, but the method of calculating pool betting profits for duty purposes will be amended to exclude non-UK customers from the calculation where it is appropriate to do so.
There will also be some changes to the accounting periods for GBD and PBD returns. The accounting periods will change from monthly to quarterly. This is in line with RGD returns.

What we mean by a UK customer for remote gambling taxation purposes

For the purposes of remote gambling the definition of a UK person is someone who usually lives in the UK.

Customer verification checks

You should obtain a declaration from each gambler which shows the address at which the gambler usually lives before accepting bets.  If no declaration is received the customer will be determined as being a UK person.
You should also carry out verification checks on the information provided if a customer gives an address outside the UK.
These procedures must be built into any customer handling processes.
More information about UK customers and verification checks can be found in the Gambling Tax Regime 2014 information note.

What to do if you become liable to gambling duty from 1 December 2014

If you become liable to one or more of the gambling duties (RGD, GBD, or PBD) under the new rules, you must register for the appropriate duty, submit returns and pay any tax due in sterling.
If you will be required to hold a ROL from the GC, you must register and submit returns online. If you don’t have to operate under a ROL you can register and submit returns on paper, however HMRC recommends that you use the online service.

When and how to register under the new rules

If you will become liable to one of the gambling duties you must register by 1 December 2014. The GT online service for registration will open in early autumn 2014, giving you plenty of time to register before the 1 December 2014 deadline.
HMRC will publish guidance on how to register before September 2014.

Existing operators who have notified /registered under the current rules

If you are already a gambling operator and have notified HMRC of a GBD liability or have an HMRC pool betting permit or you have already registered for RGD you will not have to register under the new arrangements.
HMRC will automatically transfer your existing notification/registration to the GT online service. HMRC may need additional information about your business to carry out the registration process and if more information is required you will be contacted during summer 2014.

Remote gambling operators outside the EU

You may be required to appoint fiscal and administrative representatives if you are a remote gambling operator based in a country outside the EU and:
  • The UK does not have an appropriate debt collection and assistance agreement with the country
  • You are not part of a group registration with a UK-based operator
Any fiscal and administrative representatives will need to be established in the UK and to be agreed by HMRC. HMRC will publish further guidance about this before the new rules begin.

Betting operators liable to GBD and PBD – changes to accounting periods

If your betting business is currently liable to GBD and PBD (mainly those with betting shops), under the new rules you will have to submit your returns and payments quarterly rather than monthly. Quarterly accounting periods already apply to RGD.
Gaming Duty (casinos) and Bingo Duty (land based bingo) will be unaffected.
Transitional arrangements will be put in place for existing operators to switch from monthly to quarterly returns. Further details will be published before the new rules are introduced.

Returns and payments for RGD, GBD and PBD

If you are registered for RGD, GBD or PBD you will need to submit four returns each year. Returns and payments (in sterling) are due by the 30th day following the end of the accounting period.
If you are required to hold a ROL or if you register online through the GT Online Service you must submit returns online.
If you do not have to operate under a ROL and decide to submit returns on paper, HMRC will send you a paper return to complete at the end of each accounting period.

Using the GT online service to submit returns

If you haven’t already signed up for HMRC Online Services (for other taxes) you will be automatically enrolled to use our online service following the online registration process. This will allow you to submit your return online.
If you’ve already signed up to use HMRC Online Services you just need to add the GT online service to your existing services to submit your return online.
HMRC will publish guidance covering all aspects of the GT online service before the new rules start.

Making returns and payments

Returns and payments are due by the 30th day following the end of the accounting period.
If the end of your accounting period falls on a weekend or bank holiday both your return and payment must reach HMRC by the previous working day.
HMRC recommend that you pay electronically.
  • Bacs Direct Credit
  • Faster Payments by online or telephone banking
Payments from outside the UK can be made by transferring funds electronically from an overseas bank through the SWIFT banking system. This will involve holding an International Bank Account Number (IBAN) and a SWIFT Bank Identifier Code.
More information about paying HMRC

Enforcement of the new rules

The new rules will be supported by enforcement measures, including, unlimited fines or the loss of a ROL issued by the GC.

Further information

More detailed information can be found by following the link below to an information note about the changes.
Gambling Tax Reform 2014 (Opens new window) (PDF 75K)

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