UK considers tax concession for online gaming companies
Seven years ago, a number of UK online gambling companies moved their operations abroad to tax havens such as Malta, Gibraltar and the Channel Islands to avoid a 15 percent tax imposed on all online gambling services in the UK.
However, according to recent reports from newspapers and Web gaming providers, the Treasury could be ready to slash this tax to encourage online gambling companies back into the UK. It’s estimated that the current tax system has lost £2.1 billion in revenue over the past seven years.
Although the percentage at which the government will reduce the tax is not yet known, the Mail reported that it could be as much as a third. According to a report from JackpotCity Casino, a popular online gaming site, a reduction of 5 percent would save the 20 biggest offshore gaming companies £100 million in tax every year. But many online gaming companies that currently work out of tax havens will be loath to pay the tax even at a reduced rate of 10percent, the report predicted. However, for some, the deal might be enough of a sweetener to bring them back to the UK and benefit from greater regulation and industry support.
By moving back under the control of the UK Gambling Commission, consumers new to online gaming will feel more inclined to give it a try, knowing it is thoroughly and tightly controlled and regulated by the Gambling Commission, which can bring charges against companies in breach of the rules, JackpotCity Casino added.
According to figures from the UK Gambling Commission, online gambling earned £20.1 billion between April 2011 and March 2012 and online gambling is growing at a rate of 15 percent annually throughout the European Union (EU).