Gibraltar and Isle of Man Tax Authorities Agree to Enforce UK’s New Taxes

In line with the forthcoming implementation of UK’s new gambling duties, the governments of Gibraltar and the Isle of Man, through their respective revenue agency or taxation authority, have agreed to impose on behalf of the UK government, the gambling tax liabilities due from businesses with established principal place of operations in Gibraltar or in The Isle of Man.

Her Majesty’s Revenue and Customs (HMRC) announced last September 08, 2014 that any business not belonging to a group, founded and based outside of the European Union must take on a tax representative, if they will be liable for remote gaming duty (RGD), general betting duty (GBD) or pool betting duty (PBD) beginning December 01, 2014. The HMRC stated the following conditions that exempt a business with liability to RGD, GBD, and PBD, from selecting a UK tax representative:

  • If the business is based in the European Union
  • If the business is based in the United Kingdom
  • If the business is based in Iceland, Norway, the Faroes, New Zealand or South Africa
  • If the business is based in a jurisdiction that has a standing agreement with the UK government to enforce gambling duties on behalf of the latter; in such cases, the HMRC deems it no longer necessary to require the remote business operator to appoint a UK-based tax representative.

The HMRC gave confirmation that the governments of Gibraltar and The Isle of Man have already agreed to impose UK’s taxes, which denotes that remote gambling businesses operating under their respective authority are not required to assign a UK tax representative.

Still, the British government will monitor the actions of the authorities with whom an agreement was made and reserves the right to withdraw from the agreement, if it finds that the actions taken are not satisfactory. In which case, the businesses with gambling duty obligations and based in the jurisdiction concerned, will have to employ a representative in UK.      

The HMRC further explained that a remotely operating business could take on a fiscal representative who will be jointly and severally liable for the fulfillment of the gambling duty. Another option is for the remote business to employ a UK-based administrative representative who will not be jointly and severally liable for the tax obligation, but the business will have to put up a security.

Moreover, even if a business is located in a jurisdiction that has a standing agreement for the enforcement of gambling duty liability, the UK government likewise reserves the right to require security from remote businesses that have a history of poor compliance, as far as settlement of their gambling tax liabilities are concerned.

If a remote gambling operator is a member of a group, a tax representative is also not necessary. Provided, however, that the group is under a common control and at least one of the group members maintains a principal place of business in the UK. Each group accounts for only one type of tax, GBD, RBD or PBD and not in any case, for all types of taxes. Every group member is jointly and severally liable and that the appointed leader of the group maintains a UK-based principal place of business.

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