Offshore-Based Online Gaming Companies May Face Big Tax Bill

The DailyMail reports that gambling companies that operate offshore will be hit with a £300 million tax bill.

The Treasury will tax bookmakers on profits generated from British consumers, regardless of where companies are based.  Those whom try to evade the tax will face as many as seven years in jail, unlimited fines, or have their gambling license revoked.

In order to reduce costs, high street bookies like William Hill, Ladbrokes, and Corals have stationed their online operations offshore in tax havens such as Gibraltar.

Worth over £2 billion per year, the UK remote gambling market will bring in an estimated £300 million in additional tax revenue when the new tax rules come into effect in December 2014.

Government officials say that requiring all online betting operations that conduct business in the UK to obtain a license will “ensure they participate in tackling corruption in sports, provide funding to combat problem gambling and ensure adequate protection of children and vulnerable adults.”

“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 in the future,” says Economic Secretary to the Treasury, Sajid Javid. “These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances.”