HomeInsightsHMRC guidance on tax treatment on freeplays


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HMRC has published guidance on how to calculate Remote Gaming Duty (RGD) on freeplays.

The guidance seeks to explain which online gambling freeplays and bonuses are liability to tax, and how to calculate the liability.

Remote gaming operators have historically benefitted from a more generous tax treatment in RGD when they offer freeplays to customers than is the case for operators offering free bets on events. However, following a consultation in 2016, the Treasury announced plans to charge RGD on remote gaming freeplays to bring them in line with the treatment for free bets under the general betting duty.

The draft legislation in the consultation originally set out that any freeplays that are subject to re-wagering requirements were to be treated as taxable gaming payments on each occasion played. However, the government accepted that taxing all freeplays in remote gaming would impose greater burdens than expected and as a result, it was decided that the new tax will only apply to the “first use” of freeplays.

The changes were included in the Finance Bill earlier this year but were subsequently excluded. The proposal now forms part of the Finance Bill No.2 and the changes are due to have effect for accounting periods that begin on or after 1 August 2017.

To read HMRC’s guidance, click here.