Changes to Gaming Duty accounting periods and administration of the tax
Updated 31 October 2018
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Who is likely to be affected
UK casino operators.
General description of the measure
This measure makes changes to the way Gaming Duty is calculated and accounted for.
Businesses liable to Gaming Duty will be required to complete returns on a 6 monthly basis and will no longer be required to make payments on account part way through their accounting periods.
This measure also allows businesses to carry forward losses from one accounting period to be offset against future Gaming Duty liabilities.
Policy objective
This measure brings Gaming Duty more into line with the administration of other gambling duties. It simplifies the accounting process for casino operators, and the ability to carry forward losses makes the tax system fairer.
Background to the measure
The government announced at Autumn Budget 2017 that it would consult on options to bring the administration of Gaming Duty more into line with other gambling duties. On 9 April 2018, HMRC published a consultation Gaming Duty - review of accounting periods to gather views on options for change. This consultation closed on 4 June 2018.
A summary of responses and draft legislation were published on 6 July 2018.
Detailed proposal
Operative date
The changes made by this measure will have effect on 1 October 2019.
Current law
Current law is found in Part I of the Finance Act 1997 and the Gaming Duty Regulations 1997 (Statutory Instrument 1997/2196).
The Finance Act 1997 defines Gaming Duty accounting periods and sets out the current bands of gross gaming yield and duty rates. Part II of the Regulations sets out the requirement for payments on account.
Proposed revisions
Legislation will be introduced in Finance Bill 2018-19 which will amend Finance Act 1997 and the Gaming Duty Regulations 1997. The amendments will:
- amend paragraph 9 of Schedule 1 to Finance Act 1997 to provide for HMRC to be able to direct, or agree, ‘alternative accounting periods’ that may be longer or shorter than the standard 6 calendar month accounting period or start other than in April or October, and inserts new sections 11(4A) and (4B) to apportion the duty as appropriate
- allow for losses in one accounting period to be carried forward and used to reduce duty liability in future accounting periods
- remove the current obligation to make payments on account
- provide for transitional arrangements to bring all accounting periods under the current system to a close on 30 September 2019, and begin all accounting periods under the new system from 1 October 2019
Summary of impacts
Exchequer impact (£m)
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2024 to 2025 |
|---|---|---|---|---|---|
The Office for Budget Responsibility has included the impact of this measure in its forecast at Budget 2018.
Economic impact
The measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure has no impact on individuals or households as it only affects businesses that are required to account for Gaming Duty.
There is no impact on family formation, stability or breakdown.
Equalities impacts
The measure is not expected to have different impacts on any protected equality groups.
Impact on business including civil society organisations
This measure will impact on approximately 50 casino operators.
These businesses are expected to benefit from the simplified accounting process, removing the requirement to make payments on account, and the ability to now carry-forward their losses, which makes the tax system fairer for them.
The impact on admin burdens is expected to be negligible. One-off costs include familiarisation with the new rules, and could include an initial updating of systems to reflect the new accounting periods and the ability to carry forward losses.
Ongoing savings may result from the need to submit returns less frequently.
There is no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
HMRC will incur costs adapting existing IT systems to deliver this change at an estimated cost of £200,000. Customers will move from 4 to 2 returns each year and will see changes to the return format to accommodate the carry-forward of losses.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from tax returns.
Further advice
If you have any questions about this change contact John Waller on Telephone: 03000 588 063 or email john.c.waller@hmrc.gsi.gov.uk