The Treasury and HMRC have published a document summarising the outcome of their consultation to tax remote gambling on a place of consumption basis.
The document also contains draft legislation.
The consultation, which ran from 5 April 2012 to 28 June 2012, proposed a place of consumption approach to taxing remote gambling aimed at providing a fairer basis for competition between remote gambling operators supplying the UK market from the UK and from overseas.
Currently, remote gambling operators are able to avoid UK gambling taxes by supplying from abroad.
Respondents raised two main concerns, the first being the way in which the government would define a 'UK customer' and the second being the mechanisms that would be put in place to ensure the successful enforcement of the reformed tax regimes.
The government has decided that for the purposes of remote gambling, the definition of 'UK customer' will be based on where the customer usually lives, this being the preference indicated by the majority of respondents.
The government have also decided to employ a number of tools to help ensure compliance with the reformed tax regime. These will include HMRC working with other tax jurisdictions to recover outstanding tax debts; HMRC requiring operators based in jurisdictions with which the UK does not have a reliable debt collection and assistance agreement to appoint a fiscal or administrative representative, with a security being required for the latter; and HMRC requiring operators with a poor compliance history to provide them with a security.
The government also intends to create a new summary criminal offence for operators that are required but fail to provide a security to HMRC and for failure to appoint a fiscal or administrative representative when one is required.
Serious cases of non-compliance will see HMRC initiating a process that will require the Gambling Commission to suspend an operator's ROL.
The government welcomes views, by 30 September 2013, on the issues raised in the document and the draft legislation. The reform is expected to be implemented on 1 December 2014 following legislation in Finance Bill 2014. A complete draft of the relevant Finance Bill clauses for a full technical consultation is expected to be published in the autumn.
More details are available from HMRC HERE