Is the UK to make a good attempt to get operators back?
A statement was recently made by online gambling analyst James Hollins of Evolution Securities, regarding UK taxation and online gambling companies that have relocated offshore for business reasons.
Namely, big UK firms like Ladbrokes, Stan James, Victor Chandler, Betfair and William Hill set up operations offshore to escape extremely high 15-percent tax in Britain which prevented them from being competitive.
Still, it was thought that the UK government may take it back at those companies by forbidding them to advertize in the UK, and perhaps requiring them to take out an additional (UK) license if they want to access the UK market.
However, a more attractive strategy may be applied in this case, as well, in the form of amendments to the Controlled Foreign Companies (CFC ) rules, which could be moderated by a special tax concession for offshore companies which repatriate their internet operations.
What this amendment could change is the existing practice of attributing foreign profits to UK tax unless they fall within specific exemptions, so based on the new regulations, the UK tax would only be applied to GPT derived from activities in Britain, leaving offshore profits subject only to a six percent or perhaps even less concessionary rate.
And even though this six-percent tax is still higher than in offshore jurisdictions, it may be a good and more attractive alternative to possible exclusion from the UK market, experts say, so it could actually work and attract some of the major companies to return to the UK.