HMRC Accepts a New GGY Tax Bands Proposal, Effective April 2022
HM Revenue & Customs (HMRC) has accepted a new proposal considering the gross gaming yield (GGY) tax bands. According to this new policy, the GGY tax bands that are applied to the earnings of land-based casinos will expand. The main goal behind these new tax bands is to maintain the duties of casino operators at “real levels of inflation.”
The New Tax Bands Will Be Effective in 2022
As reported, the new tax bands on casinos’ GGY will be effective on April 1, 2022. Currently, HMRC applies massive tax banding on GGY of land-based casinos. Depending on if the GGY is between $3.4 million and $19 million (£2.5 million and £13.8 million), the tax banding is between 15% and 50%. These tax bands saw the light of the day back in 1997, and they were last amended this year.
With the new revision, which will be applied in the 2021/2022 Finance Bill, the casino GGY bands will be taxed at 15% for up to $3.5 million (£2.6 million), while operators who have a GGY higher than $20 million (£14.6 million) will be subject to a 50% tax.
As it is described in the statement, this measure will ensure that the casinos’ gaming duty is maintained at real levels. The reason why the bands were increased is that in the scenario of them remaining the same in line with the current inflation, more GGY would’ve been subject to higher rates over time.
HMRC pointed out in its summary that the new tax bands will not impact the economy significantly and that the Exchequer’s tax estimates will not be affected. Moreover, the new tax bands should impact the casino payouts and prices, which is something that consumers should know.
Even though the 50 licensed operators in the UK will experience little to no negative impact, HMRC stated that the revision should be considered as an expected routine uprating of the industry.
HMRC Needs to Be Careful With Tax Policies
The goal of HMRC may be strict in its process of collecting taxes, but this summer, it proved that even this governing body can make massive mistakes, one of which is connected to Rank Group. A court acknowledged the fact that HMRC assessed taxes in an improper way. HMRC did not appeal to this case, which is why it will provide Rank Group with a massive VAT that was collected between 2005 and 2013.
According to estimates, the estimated refund that Rank can expect from HMRC is around $110 million. The original plaintiffs of this dispute were Rank and Betfred, and this ruling opened doors for many gambling-related businesses to appeal for tax rebates.
Filip Mishevski has been covering online gambling and cryptocurrencies for the past few years. He has written countless articles, how-to-guides, insights and news, and is keen on sharing his extensive knowledge in the aforementioned fields. He’s very passionate about soccer and MMA and is interested in how the online gambling industry will shape our future and thus, influence our lives.
