Changes to UK Taxation

23 June 2012

The UK has proposed changes to its taxation system of online gambling and its resolution will be known on 28th June. The initiative proposes a tax of 15% to operators providing gambling services to residents of the UK. Currently only the rooms UK based pay taxes, thus most operators are based offshore.

Under the Game Act 2005, any operator could operate in the UK since it had his gaming license. The rooms with the local office had an obligation to pay 15% gross in tax (defined by the number of bets less prizes paid).

It is not surprising that so many operators choose to be headquartered in places like the Isle of Man, Alderney and Gibraltar without paying taxes to the country. In fact, all operators that offer services to players from the UK, only 10% are local and pay taxes (with the majority being bingo and lottery).

However, this will change.

We  can read in the oficial bill:

"The current taxation regime for remote gambling has allowed operators to avoid paying UK gambling duties by basing their operations abroad. To broaden the tax base and provide a fairer basis for competition between UK and overseas remote gambling operators, Budget 2012 announces that the Government will move to a tax regime that ensures operators anywhere in the world pay gambling duties on gross profits generated from customers based in the UK. This is in line with the actions of several other European countries."


"The Government will introduce a place of consumption based taxation regime for remote gambling, subject to consultation on the detail. (future Finance Bill) (24)"

Meaning that there will be no point for companies to set headquarters in ofshores, if they supply services in the UK they will pay the tax.

Thus, the rate that the government intends to adopt is inferior to other regulated markets such as Spain, France, Italy or Denmark, but higher than in Belgium or Estonia.

According to the proposal, the changes will have small impact on the players and operators. Let’s see what 28th reserves for UK players.


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