William Hill to Challenge New UK Gambling Tax Proposal
William Hill announced today that it had instructed its lawyers to prepare a legal challenge against the UK’s newly proposed online gambling law that would tax operators on the point of consumption.
UK sources have reported that William Hill Plc. is extremely unhappy with the United Kingdom’s intention to adopt a new online gambling law that would require offshore operators to pay taxes in the country even if they are based abroad.
The new legislation is supposed to introduce a taxation rate of 15% of profits earned by offshore gambling companies in the United Kingdom. Companies that decide not pay this tax would be banned from the country.
It’s expected that the new law would come into effect sometimes in 2013 but more likely around the end of 2014. What’s for sure is that the UK government is very determined to realize this so it’s unlikely that the legal challenges of operators will be of success.
William Hill CEO Ralph Topping in an interview today commented that lawyers of the company are very optimistic about the outcome of a legal challenge against the new UK gambling tax regime. For this reason Topping gave the green light to the development of a case that would be submitted sometimes this year.
Jason Chess, representing the law firm Wiggin which is in collaboration with William Hill and other gambling companies, commented the following:
“You cannot restrict the free movement of goods and services in order to raise your own national tax. We can’t stop BMW from selling BMWs in this country because the tax is paid in Germany.”
While this is true, it appears that when it comes to online gambling most countries in the European Union disregard this policy and it appears that the European Commission has no power to prevent this from happening.
Other countries such as Belgium, Spain, Italy and others have also implemented similar policies each time violating core European Union principles but of course nothing happened at all. The same is expected to happen in the United Kingdom as well.
But the biggest reason why operators don’t agree with the new UK online gambling tax proposal is because it imposes a very unreasonable tax rate. Just recently Ireland announced that it intends to adopt a similar policy but the Irish proposal was welcomed by operators since it only imposed a turnover tax of 1%.
Earlier this year the United Kingdom announced that it intends to adopt a new online gambling taxation policy that would require offshore operators to pay taxes in the UK despite the fact they are not located in the country.
At that time the majority of gambling operators argued that such a rule would only encourage players to play at unlicensed gambling brands and would not work unless the current tax rate would be lowered considerably.