Forecasts from the number crunchers at GamblingData predict that the introduction of the Point of Consumption (POC) tax law will inject £386 million into the coffers of the UK Treasury.
It was early 2012, when news first broke of the UK coalition government’s intention to tax online gambling companies at the POC at a proposed rate of 15%. The introduction of a POC tax was created to prevent offshore online gambling companies from tax dodging in the UK.
GamblingData believe that in terms of UK-derived revenues, the online gambling market will be worth £2.74 billion by 2015. The introduction of a 15% POC tax will see some UK customers move into unlicensed markets, so taking a percentage of migrators into consideration, GamblingData believe that the UK Treasury should expect to see £385.7 million in POC tax revenues during 2015.
The noise emanating from the UK Gambling Industry has remained constant that a POC tax rate of 10% is more sensible. But even if their dreams were to come true, then the UK Treasury would still be handling an additional £274 million in taxes.
Nearly all of the UK-based gambling companies have fled to offshore tax havens in the past decade. This includes major UK players like Betfair, Ladbrokes and William Hill. William Hill were the first company to voice a potential legal fight against the UK government for what they saw as an attempt to restrict the free movement of goods and services for tax purposes.
But for the companies who did not leave the shores of Old Blighty the POC tax brings positive benefits. Bet365, which remains a UK-land based gambling company, will not have to pay taxes on revenue earned by their overseas customers once the new legislation comes into effect.
The introduction of a POC tax could see the big boys return to the UK, and although that will mean more job opportunity on these shores, there is bound to be job losses in the likes of Gibraltar should the brick and mortar headquarters move back home.
The tax predictions are an outcome of the work that GamblingData have done on the future of the online gambling market in the next three-years. These predictions contain information that suggests that the UK online market breached the £2 billion barrier for the first time.