HMRC Introduces Higher Gaming Duty Bands to Casino Operators as of April 1st, 2022

Daniel Williams

Casino companies in the UK will face a change in their tax payments as of April 1st, 2022. This became clear after the autumn budget was delivered to the House of Commons by Chancellor Rishi Sunak.

Reportedly, gross gaming yield (GGY) bands are set to grow in line with inflation, which basically means that gambling companies in the UK will have to generate winnings in order to be able to make the increased gaming duty payments. Gaming duty in the UK has a progressive tax structure, in which companies become subject to marginal rates depending on their earnings. In other words, companies that earn more, also pay more to the UK Government.

Under the existing UK law – section 108 of the country’s Finance Act 2021, the minimum duty rate imposed on gambling companies is 15%, with the tax applicable to the first £2.5 million generated by the operator. The duty rate rises to 50% on any earnings of the gambling company which are worth more than £13.8 million.

The Finance Act 2021 came as an amendment to an earlier piece of legislation dated 1997. However, it will now become subject to change, as casino operators will now be required to pay 15% on their first £2.6 million revenue, while the 50% GGY band will be applicable to earnings over £14.6 million.

Casino Operators Need to Maintain Gaming Duty at Real Levels, UK Government Says

The HR Revenue and Customs (HMRC) explained that British casino operators pay the gaming duty based on their gross gaming yield. As shared by the HMRC, the GGY can be explained as the total amount spent by customers minus the winnings which the casino operators pay to their players. The duty, on the other hand, is determined by reference of GGY to bands. The increase in the rate used to calculate the duty is related to the increase in the GGY.

The new measure has been unveiled by the UK Government, as it hopes to see the casino operators maintain their gaming duty at real levels. The change is expected to have a very small impact on about 50 casino companies. The HMRC also revealed that minor changes will have to be brought to its IT systems in line with the gaming duty alterations, with these changes estimated at approximately £30,000.

The latest changes in the UK casino operators’ gaming duty are set to be rolled out in Finance Bill 2021-22, to increase the GGY values in the Finance Act 1997 section 11(2). They cover an accounting period of 6 months, with companies liable to gaming duty being expected to submit a return for each period. The gross gaming yield bandings are set to be used for the calculation of casino operators’ gaming duty liability.

Daniel Williams

Daniel Williams

Daniel Williams has started his writing career as a freelance author at a local paper media. After working there for a couple of years and writing on various topics, he found his interest for the gambling industry.

Daniel Williams
Author: Wanda Peters