UK government seeks feedback on plan for single tax for remote gambling

HMRC is considering the integration of three separate tax categories to create a single Remote Betting and Gaming Duty (RBGD).

UK.- The UK’s tax, payments and customs authority, His Majesty’s Revenue and Customs (HMRC), has initiated a consultation aimed at gathering input on the tax framework for remote gambling applicable to Gambling Commission-licensed operators. It plans to restructure the tax system to reflect the growth and evolution of the segment.

The headline proposal is the integration of three separate tax categories – Remote Gaming Duty, General Betting Duty, and Pool Betting Duty – into a new single category termed Remote Betting and Gaming Duty (RBGD).

The current Remote Gaming Duty, which covers online slots, poker, bingo and similar, is levied at 21 per cent of gross profits based on a place of consumption (POC) model. General Betting Duty varies depending on vertical: fixed-odds betting is taxed at 15 per cent, sports spread betting at 10 per cent, and financial spread betting at 3 per cent. Pool Betting Duty is charged at 15 per cent on gross profits, applicable to sports pools only (excluding horse and greyhound racing).

Under the HMRC’s new proposal, the combined RBGD would maintain the POC principle, which has been in place since 2014. This states that operators pay UK taxes if their customers are located in the UK, regardless of the operators’ own country of domicile.

The government says the aim is to simplify the tax system for both the HMRC and stakeholders and to acknowledge the growing prominence of online gambling, which now generates £6.9bn in annual gross gambling yield (GGY).

The HMRC said: “The government believes now is the right time to explore further reforms, creating a simpler and more coherent tax system that aligns with the industry’s evolution.”

The scope of the consultation does not extend to discussing the rate for the proposed RBGD, focusing instead on technical insights on implementation. The consultation period will span 12 weeks, concluding at midnight on July 21. Stakeholders can provide feedback through an online submission form.

There were calls last year for UK to increase gambling taxes. However, chancellor Rachel Reeves rejected this as a possibility for the Autumn 2024 Budget. Instead, Reeves said the HMRC would review the remote gambling tax framework by 2026.