UK government to implement online tax rise before FOBT stake cuts

The Times has this morning reported, that the UK government will delay its implementation of an industry-wide £2 FOBT machine stake reduction until April 2020, citing that the UK Treasury has struck a ‘backroom deal’ with betting leadership.

Last May, UK Culture Secretary Matt Hancock confirmed the government’s decision to reduce FOBTs wagering levels to £2 limit, stating that the government would implement the UKGC’s recommendations on the controversial subject matter.

Upon the announcement of the £2 cut, industry leaders urged the government to implement a ‘transition period’ aimed at reducing the impact of the judgement on the UK betting sector’s retail enterprises.

In its report, The Times states that betting leadership has convinced the Treasury to adopt an ‘extended implementation period’ to reprogram betting shop terminals.

The reported delay on FOBTs reductions is set to have deepened the rift between Matt Hancock’s DCMS department and the Treasury. Overseeing the implementation of UK gambling laws DCMS expected the new FOBTs wagering regulations to be implemented within a nine-month period.

Prior to the government’s decision to implement a £2 reduction, UK news sources reported that Treasury leadership had expressed concerns related to lost duties, as the Office of Budget Responsibility detailed that FOBTs machines could raise circa ‘£74 million of the forecasted £119 million in UK machine gaming duties for the period up to 2023’.

However, it appears that UK betting will not be able to escape political implications, as The Times reports that the Treasury will move to impose a higher tax rate on online gambling services which will be delivered in the April 2019 budget.

An online gambling tax hike is designed to compensate the exchequer for the loss of tax revenues from lower FOBT profits. At present, little is known with regards to the government’s potential new online gambling tax rate, however, the potential introduction before the lower FOBT stake mandate would see the UK Treasury benefit from a year of double taxation.

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