New rules for some Gambling Duties from 1 December 2014
From 1 December 2014, HM Revenue & Customs (HMRC) is changing the rules for General Betting Duty (GBD), Pool Betting Duty (PBD), and Remote Gaming Duty (RGD).
This guide gives a brief overview of the key changes and what you will need to do if the changes affect your business.
The new rules will affect:
Land based gaming sector businesses such as casinos and bingo halls will not be affected by these new rules unless they offer remote betting or gaming.
Premises based betting and the treatment of spread betting will be unaffected except for some administrative changes.
The new rules don't start until 1 December 2014, although you may need to carry out some preparation before then.
HMRC will publish full guidance on all aspects of the changes. HMRC has already published three Information Notes which set out some of the things it is proposed the guidance will say. You can read these by following the links at the end of this article.
If you are a gambling operator you are advised to make sure that everyone in your organisation who needs to know about the changes is kept informed and in-house systems and procedures are reviewed accordingly.
To support you with the changes, HMRC is introducing a new online service.
You, your agent or other representatives will be able to use the GT online service to:
Under the current tax rules, gambling activities are taxed on a 'place of supply' basis. This means that if you are supplying gambling from the UK, you pay tax on all of your gross gambling profits, while operators supplying UK customers from outside the UK pay no UK gambling taxes.
HMRC is changing the basis of how these duties are taxed from 'place of supply' to 'place of consumption'. This means that you will become liable to one or more of the taxes (GBD, PBD and/ or RGD), if you offer remote gambling to a person who usually lives in the UK. This applies no matter where in the world you are based.
If you supply remote gambling to UK customers from outside the UK you will become liable to a UK gambling tax for the first time and GBD, PBD and/ or RGD will become payable. UK based operators who supply remote gambling to customers who do not usually live in the UK will no longer be liable to GBD, PBD and/ or RGD on those transactions.
If you hold or are required to hold a Remote Operating Licence (ROL) from the Gambling Commission (GC) you must register for the appropriate tax/es and file returns online. If you are not subject to the ROL rules HMRC recommends that you use the online service as it’s quicker and more secure. If you cannot access the online service (and are not subject to the ROL rules) then HMRC can make paper forms available.
If you offer remote gambling to UK customers you will have to be able to establish which of your customers are ‘UK people’.
Pool bets on horse or dog racing are currently charged with GBD. This
won't change, but the method of calculating pool betting profits for
tax purposes, for both GBD and PBD, will be amended to exclude non-UK
customers from the calculation where it is appropriate to do so.
There will also be some changes to the accounting periods for GBD and PBD returns. The accounting periods will change from monthly to quarterly. RGD accounting periods are already quarterly.
There will be no change to the way that GBD is calculated on spread betting receipts, although quarterly rather than monthly returns will be required. However, spread betting operators will be able to use the GT online service.
For the purposes of these new rules the definition of a UK person is someone who usually lives in the UK.
You will need to ask your customers whether or not they usually live in the UK and collect and analyse data to verify what the customers tell you. This is covered in more detail in the Addendum to Information Note December 2013 (PDF 17K).
If you become liable to one or more of the gambling taxes (GBD, PBD and/or RGD) under the new rules, you must register for the appropriate tax, submit returns and pay any tax due in sterling. A separate registration is needed for each tax but operators registering online will only have to enter the same information once.
If you will be required to hold a ROL from the GC, you must register and submit returns online. If you don't have to operate under a ROL HMRC recommends that you use the online service as it’s quicker and more secure. If you cannot access the online service (and are not subject to the ROL rules) then HMRC can make paper forms available.
If you will become liable to one of the gambling taxes at 1 December 2014 you must register by 1 December 2014. The GT online service for registration will open in early autumn 2014, giving you plenty of time to register before the 1 December 2014 deadline.
HMRC will publish guidance on how to register before the registration service opens.
If you are already a gambling operator and have notified HMRC of a
GBD liability or have an HMRC pool betting permit or you have already
registered for RGD, HMRC will move you to the new registration system
being developed for the reforms.
HMRC have already written to you alerting you to the change. Over the summer, HMRC will be writing to you again asking for some further pieces of information about your. Once HMRC has the necessary information we will register you and issue you with a ‘registration certificate’ which will include a new registration number for each tax that you are registered for.
Corporate bodies under a common controller will be able to apply for group registration online and in the same way that they would apply for separate business registrations. A separate registration is needed to form a group for each tax. You will need to appoint a group leader who has a principal place of business in the UK and who will deal with HMRC on a day to day basis.
You may be required to appoint a fiscal representative who will have joint and several liability for your tax or provide security and appoint an administrative representative if you are a remote gambling operator based in a country outside the EU and:
Any fiscal and administrative representatives will need to be in the UK and to be agreed by HMRC. Further guidance about appointing representatives and providing security can be found in the Gambling Tax Reform: Information Note 3 (PDF 78K).
If your betting business is currently liable to GBD and PBD (mainly those with betting shops), under the new rules you will have to submit your returns and payments quarterly rather than monthly. Quarterly accounting periods already apply to RGD.
Gaming Duty (casinos) and Bingo Duty (land based bingo) will be unaffected.
Transitional arrangements will be put in place for existing operators to switch from monthly to quarterly returns. You will need to make a final return under the existing rules to cover the period up to and including 30 November 2014. We will publish further details before the new rules are introduced.
If you are registered for RGD, GBD and/ or PBD you will need to submit
four returns each year.
NIL returns will be required even if you don’t owe any tax for the period.
If you are required to hold a ROL or if you register online through the GT online service you must submit returns online.
If you don't have to operate under a ROL HMRC recommends that you use the online service as it’s quicker and more secure. If you cannot access the online service (and you are not subject to the ROL rules) then HMRC can make paper forms available.
You must keep your records for four years.
Returns and payments (in sterling) are due by the 30th day following the end of the accounting period.
If the 30th day falls on a weekend or bank holiday, both your return and payment must be with HMRC by the end of the last working day before that day.
HMRC recommend that you pay electronically by:
If you cannot pay using one of the electronic methods listed above, you can send a cheque, in sterling, to be drawn on a UK bank. You should allow at least three working days for your payment to reach HMRC from the UK – you will need to allow longer if the cheque is not sent from the UK. This allows for any delays in the post outside HMRC's control.
Payments from outside the UK can be made by transferring funds electronically from an overseas bank through the SWIFT banking system. This will involve holding an International Bank Account Number (IBAN) and a SWIFT Bank Identifier Code (BIC).
From 01 December 2014, your returns and payments must be made on a
quarterly basis. The term we use to describe a quarterly period
covered by a return/ payment is an ‘accounting period’.
Each standard accounting period ends on the last day of the relevant
month. If standard accounting periods do not suit your business,
you can ask HMRC to use four non standard accounting periods for each
tax that you are liable for.
Each non standard accounting period must be broadly a three month period. You will have to give us your proposed end dates for each non standard accounting period for a two year period. And you will need to reapply towards the end of the two year period if you want to continue with non standard accounting periods.
The new rules will be supported by enforcement measures, including, unlimited fines or the loss of a ROL issued by the GC.
If you haven't already signed up for HMRC Online Services (for other
taxes) you will be automatically enrolled to use our online service
following the online registration process. This will allow you to submit
your return online.
If you've already signed up to use HMRC Online Services you will need to add the GT online service to your existing services once you have registered for GBD, PBD and/or RGD. You will then be able to submit your returns online. HMRC will publish guidance covering all aspects of the GT online service before the new rules start.
More detailed information can be found by following the link below to an information note about the changes.