At 12.10 on Wednesday 19 September, as part of SBC Events “Betting on Sports” week at Olympia, London, David Clifton will be moderating a CasinoBeats panel session entitled “UK Tax Hike”. His panellists will be Clive Hawkswood, CEO of the Remote Gambling Association (“RGA”), Steven Effingham, Director of Tax Policy at Ernst & Young and James Myles, Director of Eta Delta Limited.
As explained in a CasinoBeats Summit Panel Preview (that can be downloaded below), this session will focus on the UK Government’s decision to increase remote gaming duty paid by online gaming operators from its current level of 15% (with conjecture that it could rise to 20% or even more) “in order to cover any negative impact on the public finances, and to protect funding for vital public services” following the Government’s May 2018 announcement that it would reduce the maximum stake on an FOBT [B2 gaming machine] from £100 to £2. This provoked an immediate pledge by the RGA (reported in EGR) “to fight back against plans to raise taxes on online operators to cover a shortfall in lost tax revenue from FOBTs” on the ground that “the UK government’s justification as ‘unfair’”.
Fears exist that this tax hike could result in potential job losses in the remote gaming sector, to add to those within the retail betting sector considered at risk by reason of the Government’s decision to reduce the maximum FOBT stake, albeit that doubt exists on the intended date of implementation of that decision. This was most recently evidenced by concerns expressed at last month’s First Round of Inquiry Sessions of the FOBT All Party Parliamentary Group’s Inquiry “Assessing the Impact of a delayed implementation of a £2 stake”. Those concerns are supported by the Local Government Association.
A further relevant development has been the 25 July 2018 First Tier Tribunal (Tax Chamber) ruling, allowing an appeal by Done Brothers (Cash Betting) Limited, Tote (Successor) Company Limited and Tote Bookmakers Limited (i.e. Betfred) that it wrongly accounted to HMRC for VAT on income generated from FOBTs between 2005 and 2013. The appeal was allowed on the ground that most of the games offered by FOBTs are sufficiently similar to VAT exempt games played in casinos or played online to warrant a finding that treating FOBTs differently for VAT purposes constitutes a breach of fiscal neutrality.
Suggestion has been made that not only is the above ruling worth £100million in VAT refunds to Betfred, but similar refunds to the wider industry could total £1billion. In economic terms, and pending any appeal against the ruling by HMRC, the Government may yet regard this latest development as justification not only to increase remote gaming duty and further delay implementation of the reduction of FOBT stakes, but also to increase the rate of machine games duty (currently 25% for higher rate machines costing more than £5 to play) in an attempt to recover losses sustained by HM Treasury.
The stage is set for a very stimulating panel session on 19 September and, bearing in mind the relevance of this subject to different sectors within the gambling industry, David looks forward to seeing as many clients and contacts as possible within the audience on the day.
David is not the only member of the Clifton Davies team who will be busy at Olympia next week. As reported elsewhere on our site, at 4pm on Thursday 20 September, Suzanne Davies will be moderating a panel session provocatively entitled “Are regulators the biggest threat to the industry?”. Answers to that question will be provided by Suzanne and the following members of her panel:
- Bill Mummery, Executive Director, SBOBET
- Marcus Brennan, CEO, Betbright
- Steve Donoughue, Consultant, Gambling Consultancy
- George Rover, Managing Partner, Princeton Global Strategies
Please do contact David by email email@example.com or phone 07703652525 if you plan on attending any of the sessions that make up this year’s quite spectacular “Betting on Sports” week. Registration information can be found here.
- As reported by Gambling Compliance, on 5 September 2018 Gambling Minister Tracy Crouch MP “confirmed that the stake cut from £100 to £2 for fixed-odds betting terminals (FOBTs) is likely to be announced in the autumn budget and that implementation should begin after the start of the next financial year in April 2019. In Wednesday’s evidence session for the All-Parliamentary Group on FOBTs, Crouch told the audience of MPs, bookmakers and gaming activists that the FOBT stake slash will ‘hopefully’ be enacted in the next financial year. Crouch said that the Department for Digital, Culture, Media & Sport has ‘been crossing the Ts and dotting the Is on this. We are in the final stages of finishing and we expect it to be done within the quarter'”.
- It was reported in Gaming Intelligence on 12 September 2018 that: “The proposed reduction of maximum stake levels on fixed odds betting terminals (FOBTs) in the United Kingdom is expected to come into force next year after the government notified its amended regulations to the European Commission”.