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Off-shore, online gambling to pay UK tax

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Online betting companies that have based their operations in offshore tax jurisdictions, to avoid Britain's gambling taxes, will be hit with a new levy to be introduced from December 2014. It is estimated that the new tax may raise £300m for the UK taxpayer.

The Government is to impose a 15% tax on operators in the £2bn remote gambling market. In a somewhat controversial approach, the UK will tax gambling revenues based on where the customer is located, rather than where the business is based.

Economic Secretary to the Treasury, Sajid Javid, said:

"It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the Government is taking decisive action to ensure this can no longer happen. These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances."

The shift will affect some of the industry's largest players including: Ladbrokes, William Hill and Betfair, all of which have online operations based in Gibraltar, where taxes are levied at 1% and capped at £425,000.

If introduced, the 15% levy would mean that offshore operators are taxed at the same level as domestic internet betting companies.

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