The Remote Gambling Association (RGA) has expressed its opinion that 15 percent for the new UK point of consumption (POC) tax is rather high and it is concerned that in its current state, there is no room for bonuses and incentives.
At the end of 2013, the RGA commissioned KPMG to examine the effects of the 15 percent POC tax on the British online gambling market and they determined:
1. Firms are unable to recover their costs and either go out of business or are forced to operate in the grey market; and / or
2. A very large number of UK customers switch to buying gambling products from offshore duty avoiding providers because they are able to offer lower priced, more attractive, products.
Clive Hawkswood, Chief Executive of the RGA said:
“We have repeatedly said that the reason that the vast majority of well-known British companies operate from other jurisdictions is that the UK tax burden is unreasonably heavy and makes it very difficult to compete in the international market. This new regime has given the Government the perfect opportunity to correct past mistakes and it is very worrying that despite all the evidence it has not done so.
"Not only KPMG, but other respected experts at PwC and Deloitte, have all reached the same conclusion that any rate above 10 percent GPT is not sustainable in the long term. We cannot make the case any more clearly.
"We will continue to engage with HM Treasury in pursuit of what we believe should be the common objective of establishing a viable long term UK market where licensed and tax-paying companies can not only survive but thrive.’
"Finally, it was extremely disturbing that the Chancellor referred today to the establishment of a ‘Racing Right for horseracing’. We understand that this is just one of the options that will be under consideration, but it is one that will inevitably be opposed."
