UK gambling point of consumption tax
As an online casino player, you might not be aware of the recent changes that have occurred in the industry. As of December 1st, online gambling companies will be charged an increased tax rate of 15%. So what does that mean to you as a consumer? At the moment not a lot, but in 2015 you may start to notice a few changes.
What is point of consumption tax?
Up until the new tax laws were introduced, companies who based their services offshore managed to avoid paying UK taxes. This meant they could provide services from a remote location to UK customers without being hit with UK tax. Now however, even remote companies based in other countries will be charged on point of consumption, rather than place of supply.
So, what is point of consumption? Basically it is where the services are carried out. If an online casino or gaming company is based in a different part of Europe and is offering its services to UK customers, the point of consumption will be the money spent by the UK consumer.
UK expats still count as a UK person
One notable point that companies need to understand is that a UK person doesn’t have to be based within the UK. The tax will still apply for customers who were originally from the UK. So if a person has moved abroad and they decide to use an online bingo site, the site will still be charged UK tax rates for that customer.
What do the changes mean for you?
While the new tax changes will have a serious effect on the online casino industry, it could also have an effect on consumers too. On the one hand, you know that you’ll be playing on a reliable and trustworthy site. All companies operating from the UK will now also need a UK license approved by the British Gambling Association. Therefore you can be sure you will receive a high quality, safe gaming experience.
On the other hand, the higher tax rates will be problematic for smaller sites. This means they will likely be unable to afford to provide lucrative bonuses. Welcome bonuses are one of the main things that attract new players to a site. Recently launched small gaming sites could really suffer and potentially even need to shut down in 2015.
There is the chance that bonuses will become a lot lower under the new rules. So players won’t benefit from the same level of excitement and cash rewards that they are now used to. The gaming industry saw a huge boost in bonuses from 2013 to 2014. Therefore it will really hit companies hard if they need to lower their bonus amounts.
Point of consumption tax is going to have a massive impact on the industry, but as the changes have only just been applied, it will take a while before players start to notice a difference. However, changes are likely going to be seen in 2015. So why not make the most of current big bonuses while you can?
