HM Revenue and Customs announces plans to amend tax duty regulations to online free bets. HMRC is the tax authority in the United Kingdom.
ONLINE FREE BETS: The new taxation rules relate to online freeplays, free bets, and discounted betting.
The legislation gets its inclusion in the Finance Bill 2017. So how will the new tax regulations affect online gamblers?
It relates to when a customer places a free bet or one at a reduced rate. The operator will have new requirements to account for duty.
The taxable amount is the value the consumer would have paid if the bet had not been a discounted betting offer.
The new tax rules for online betting also tackles the definition of 'prizes'. This should ensure operators do not avoid duty by using freeplay values given as prizes.
Remote gambling operators need to apply new tax regulations when the changes take effect. HMRC say extra dutiable taxes start from accounting periods beginning on or after the 1st of August 2017.
It is likely that new betting regulations will help the tax authority generate an extra £45 million in tax revenue in the 2017-18 financial year.
The figure could more than double to a whopping £110 million by the tax year 2020-21.
The amendments apply most to remote gambling operators who are liable to account for Remote Gaming Duty. That relates to gaming through the internet, by telephone, television, or radio. It also extends to any other electronic communication system.
The UK Inland Revenue confirmed the changes in a statement. "New measures will bring the tax treatment of freeplays for remote gaming into line.
They will link up with the treatment for free bets under General Betting Duty. This contributes to sustainable government finances by broadening the Gambling Duties Tax base.
It was the subject of a technical consultation and announced in the Budget 2016. The costing includes a behavioural effect to account for a change in the marketing strategy of affected operators.
There should be negligible impact on individuals and households in the UK. This measure is not expected to have a significant impact on the availability, price and payouts of remote gambling."
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HMRC Amends Duty Regulations to Online Free Bets and Discounted Betting in the United Kingdom