Gambling taxes - Remote Gaming Duty increase
Published 29 October 2018
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This publication is available at https://www.gov.uk/government/publications/remote-gaming-duty-increase/gambling-taxes-remote-gaming-duty-increase
Who is likely to be affected
Any remote gambling operators who are liable to account for Remote Gaming Duty (RGD).
RGD applies to gaming over the internet, telephone, by television, radio or other electronic communications.
General description of the measure
The rate of RGD will be increased to 21%.
Policy objective
This RGD rate increase will contribute towards the public finances.
Background to the measure
This measure was announced at Budget 2018.
In May 2018, following a consultation on proposals for changes to gaming machines and social responsibility measures around gambling, the government announced that the maximum stakes on Fixed Odds Betting Terminals were to be reduced. In order to cover any negative impact of this on the public finances, the change would be linked to an increase in RGD at the relevant Budget.
The intention to raise the rate of RGD from 1 October 2019 is being announced at Budget 2018 to give remote gaming operators sufficient advance notice of the increase.
Detailed proposal
Operative date
The new duty rate will apply for accounting periods that begin on or after 1 October 2019 and will be chargeable on profits from remote gaming from that date onward. Where this date falls part-way through an accounting period, the increased rate will be charged only on the profits that arise between 1 October and the end of that accounting period.
Current law
The RGD rate is in section 155(3) of Finance Act 2014. Currently, RGD is chargeable at the rate of 15% of the gaming provider’s profits on remote gaming for an accounting period. RGD providers file returns on a quarterly basis.
Proposed revisions
Legislation will be introduced in Finance Bill 2018-19 to amend section 155(3) of Finance Act 2014. The rate will be amended to reflect the increase from 15% to 21%.
Summary of impacts
Exchequer impact (£m)
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | +130 | +255 | +265 | +280 | +290 |
These figures are set out in Table 2.1 of Budget 2018 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Budget 2018.
Economic impact
This measure is not expected to have any significant macroeconomic impacts. A behavioural adjustment has been made to take into account changes in spending on remote gaming in response to this policy, and to account for changes in operator behaviour.
Impact on individuals, households and families
If the tax rate increase is passed on to consumers, this measure will impact on individuals or households through a change in odds.
There is not expected to impact on family formation, stability or breakdown.
Equalities impacts
The measure is not expected to have impacts on any protected equality groups.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on a small number of medium-sized and large businesses who provide online gambling services to UK customers. The impact on business admin burdens is expected to be negligible. One-off costs include familiarisation with the changes and an initial updating of systems to reflect the new tax rate. The one-off costs are estimated to be negligible. It is not expected that there will be any on-going costs. There is no impact on small and micro businesses. There is no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
This is a straightforward change to the duty rate and will have no operational impact. There is no requirement to update IT systems or tax return forms, and there is no impact on operational resources.
Customers will not see any change to the online system when filing their returns.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from tax returns.
Further advice
If you have any questions about this change, contact John Waller on Telephone: 03000 588 063 or email: john.c.waller@hmrc.gsi.gov.uk.