Tax Break Proposed for Online Gambling in U.K.

Published Sunday, December 09, 2012 -

The United Kingdom is currently trying to revamp its taxation policies to close loopholes and make sure big firms that operate in the U.K. pay their fair share of corporate levies. The Chancellor, George Osborne has been widely criticized for its failure to bring into line big corporations such as Amazon, Google and Starbucks that have been avoiding taxes in the U.K.

National protests have brought the Chancellor to realize something is amiss and something must be done. Seven years ago the Labour government implemented a fifteen percent tax on gambling firms from the U.K. prompting an exodus by many big gambling operators to more tax friendly jurisdictions such as Malta and Gibraltar.

Now the government it is rumoured will try to entice those firms to return to the U.K. with a better tax regime more in line with other jurisdictions. Protesters have said though that a tax cut for the online gambling industry would lead to more social problems by encouraging gambling in Britain. A director of Tax Justice Network, John Christensen, commented, ‘It really doesn’t make much sense to lower the rate of taxation to try to bring them back to the UK. The tax rate should remain as it is.’ The opponents to the tax break have suggested that some countries in the European Union have even higher taxes and have more restrictive policies with regard to online gambling activities. The treasury is looking to slash taxes on online gambling by one third estimating that even a five percent cut in the current rate would give operators £100 million in tax savings per year.

Hugh Robertson, the U.K.’s Minister for Sport and Tourism, commenting on the proposed bill said, “These proposals will ensure that British consumers enjoy consistent standards of protection, regardless of where a gambling business is based.”

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