UK to Hit Offshore Operators with 15% Tax

The United Kingdom is about to clamp down on online gambling companies based in offshore tax havens, by slapping them with a 15% tax rate at the point of consumption that should raise £300m. in taxes.

Point of Consumption Tax

From December 2014, online gambling will be taxed according to where customers are based rather than where the online operator is registered. That means that companies like William Hill, Ladbrokes Bwin.party and Betfair, who all have headquarters in Gibraltar, will begin paying 15% tax on all British customers.

"It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the Government is taking decisive action to ensure this can no longer happen," Economic Secretary to the Treasury Sajid Javid said. "These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances.

Companies to Challenge?

Gibraltar-based companies pay 1% taxes up to a maximum of £425,000. Under the new 15% rate, which the Government says will confirmed in its Budget statement next March, offshore operators will be taxed at the same level as locally based online gambling companies.

The Government may not have the last word though. William Hill, the largest of the UK's remote gambling operators, has threatened a number of times to challenge the laws on the grounds that they breach EU competition law.