Notice

Excise Notice 455: Remote Gaming Duty

Published 18 April 2010

This notice was withdrawn on 20 August 2015

This notice 455 is out of date and should not be used. Please read Excise Notice 455: Remote Gaming Duty (pre 1 December 2014).

This notice 455 is out of date and should not be used. Please read Excise Notice 455: Remote Gaming Duty (pre 1 December 2014).

Foreword

This notice cancels and replaces Notice 455 (December 2009). Details of any changes to the previous version can be found in paragraph 1.2 of this notice.

Paragraph 7.1 of this notice, explains your record keeping requirements and has the force of law under Regulation 6, of the Revenue Traders (Accounts and Records) Regulations 1992. This paragraph is indicated by being placed in a box.

Example:

The following rule has the force of law

Directions made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.

The person registered for remote gaming duty must retain for not less than three years every account, record or other document used or to be used by them for the purpose of furnishing the particulars required by form GD 121.

Further help and advice

If you need general advice or more copies of HM Revenue and Customs (HMRC) notices, please phone the helpline on Telephone: 0300 200 3700. You can call Monday to Friday, 8am to 8pm.

If you have hearing difficulties, please phone the Textphone service on Telephone: 0300 200 3719.

If you would like to speak to someone in Welsh, please Telephone: 0300 200 3705, Monday to Friday, 8am to 6pm.

All calls are charged at the local rate within the UK. Charges may differ for mobile phones.

Other documents on this or related subjects

Form GD120 Application for registration of Gaming Duty

Form GD121 Remote Gaming Duty

HMRC 1 HMRC decisions – what to do if you disagree

Notice 209 Civil penalties: fixed geared and daily

1. Introduction

1.1 What is this notice about?

The Finance Act 2007 introduced a new duty of Excise on the gaming profits of remote gaming operators. This came into effect from 1 September 2007 to coincide with the implementation of new social regulations under the Gambling Act 2005.

This notice explains:

• whether you have to pay remote gaming duty and what exemptions apply
• how you register, including the conditions you must comply with
• the rate of remote gaming duty
• how to calculate the duty and make returns and payments
• what records and accounts you must keep, and
• the law concerning remote gaming duty

1.2 What are the recent changes?

The notice has been amended, to reflect changes to the:

• introduction of the new penalties framework from 1 April 2010 (paragraphs 3.8,5.6 and 5.7)
• bank account details for electronic payments (paragraph 5.5)

1.3 Who should read this?

This notice is aimed at remote gaming operators and anyone else involved in providing facilities for remote gaming.

2. About the duty

2.1 What is remote gaming duty?

It is a duty chargeable when a person provides facilities for remote gaming, where:

• the provider is licensed by the Gambling Commission
• at least one piece of remote gambling equipment is used in the UK

Remote gaming means playing a game of chance for a prize through any kind of remote communication, for example the internet, telephone or interactive TV. Within this notice, the ‘provision of facilities’ has the same meaning as in section 5 of the Gambling Act 2005 and ‘remote gambling equipment’ has the meaning given by section 36 of that Act.

2.2 What gaming is liable to duty?

Anyone who holds a British operating licence, which authorises them to provide facilities for remote gaming, is liable to pay remote gaming duty on all the profits from that gaming unless it is:

• already liable to another UK gambling duty
• specifically exempted from another UK gambling duty

The other UK gambling duties are:

• Amusement Machine Licence Duty
• Bingo Duty
• Gaming Duty
• General Betting Duty
• Lottery Duty
• Pool Betting Duty

2.3 Which duty applies to Remote Bingo?

Bingo games are liable to remote gaming duty when played by remote communication. However, we make an exception for remote bingo played at licensed bingo club premises, for example, when clubs make wireless bingo equipment available to players under an ancillary remote licence. This is liable to bingo duty and falls outside the scope of remote gaming duty.

2.4 Is duty due on unlicensed remote gaming?

Yes. Remote gaming duty is due on the illegal provision of facilities for remote gaming in the United Kingdom. This means where the provider does not hold the necessary licence to provide such gaming (in Great Britain) or where the provision of remote gaming is prohibited (in Northern Ireland).

2.5 What is the rate of duty?

Remote gaming duty is 15% of a remote gaming provider’s profits at the end of each accounting period. This is the difference between stakes and payments due for taking part in remote gaming, less amounts that the operator has paid out as winnings during the accounting period.

3. Registration

3.1 Should I be registered for remote gaming duty?

If you intend to provide dutiable remote gaming under an operating licence in Great Britain, you must register with HMRC. If you provide dutiable gaming without being registered you are committing an offence and may be liable to penalties.

3.2 When should I apply for registration?

When you intend to provide dutiable remote gaming you should apply for registration. This will probably be around the same time that you apply to the Gambling Commission for an operating licence. We must however receive the application at least 14 days before you start to provide dutiable remote gaming.

3.3 How should I apply for registration?

You should apply using form GD120 Application for Registration. As this form is available online only, you can download a copy or phone the Excise and Customs helpline on Telephone: 0300 200 3700.

Send the completed form by post to:

National Registration Unit
HM Revenue and Customs
Portcullis House
21 India Street
Glasgow
Strathclyde
G2 4PZ

3.4 Do I have to provide any financial security?

Generally no, but if you hold an operator’s licence and are not resident in the United Kingdom we may ask you to provide suitable financial security to cover your potential liability. Alternatively we may ask you to appoint a representative in the UK who will be responsible for handling your remote gaming duty liabilities. We will consider each application on its own merits.

We may not initially ask for security or appointment of a duty representative, but if circumstances change we may require this at a later stage. If you fail to provide adequate security or appoint a duty representative when asked, you may be deregistered. This will mean that you will no longer be able to provide facilities for remote gaming. If you do, you will be committing an offence. We may also advise the Gambling Commission of your non-compliance.

3.5 Do foreign operators have to register if they use disaster recovery equipment in the UK?

Yes, but only if the UK-based disaster recovery equipment becomes their live gaming system if their primary gaming system is unavailable. In such circumstances the non-UK operator must register for remote gaming duty before they may use the equipment. They must also account for duty on all their remote gaming profits for the whole of any accounting period in which the disaster recovery facility is used, (that is, the duty liability is not restricted to the profits arising while the disaster recovery facility is actually ‘live’).

3.6 What trading changes must I tell you about?

You must notify the National Registration Unit (NRU) at the following address:

HM Revenue and Customs
Portcullis House
21 India Street
Glasgow
Strathclyde
G2 4PZ

within 2 weeks of any changes to the information supplied on your application for registration, which includes:

• the trading name of your business
• the address and phone number of your principal place of business
• if you are a partnership, the membership of the partnership (including the name of any new member of the partnership), and
• if you stop providing dutiable gaming

If the legal status of your business changes, you will need to make a new application for registration for the new legal entity. The NRU will advise you on this.

3.7 What will happen if I cease trading?

Tell the NRU as soon as you know your last day of trading. They will then take appropriate action to:

• deregister you
• arrange to send you a final return for any duty payment you owe, and
• release any security (where appropriate) that we no longer need

3.8 What happens if I ‘Fail to Notify’?

You could be charged a penalty if you fail to apply for a pool betting permit or notify HMRC of any business changes at the right time.

This new penalty regime applies when the obligation to notify arises on or after 1 April 2010.

For further information on the failure to notify penalty please see the HMRC website.

4. Group registration

4.1 What is a group for the purposes of remote gaming duty?

It is 2 or more companies which fulfil the following conditions:

• each provides facilities for remote gaming under a remote operating licence, and
• one controls each of the others
• one person (whether a body corporate or an individual) controls all of them
• two or more individuals carrying on business in a partnership control all of them

We must always give prior agreement to any companies that want to be members of a group.

4.2 How do I get agreement to group registration?

You should apply in writing to the NRU at the following address:

HM Revenue and Customs
Portcullis House
21 India Street
Glasgow
Strathclyde
G2 4PZ

Make sure you include your required start date as a group and the representative member.

4.3 How will treatment as a group be beneficial?

Groups will be able to have a single registration, which will cover all the member companies. This will mean that a single consolidated duty return and payment will cover the liabilities of all the members. It will save each member having to submit their own individual return.

The representative member of the group will be responsible for the completion and submission of returns and payments and for notifying any changes of registration details, etc.

4.4 Can the membership of the group be changed?

Yes. You may apply to:

• add further eligible companies to the group
• exclude members from group treatment
• substitute a different member for the representative member of the group
• dissolve the group if it is no longer required

You should apply in writing to the NRU at the following address:

HM Revenue and Customs
Portcullis House
21 India Street
Glasgow
Strathclyde
G2 4PZ

including the date you want this change to start. We normally require at least 90 days notice of any changes to the group, although we may allow shorter notice in some circumstances, for example if a company is no longer eligible for group treatment.

If we decide a company is no longer eligible to be a member of the group, we will notify you of this. If as a result of any changes the representative member stops being part of the group, you must nominate another group member to take their place. If it becomes necessary, we will appoint a member company as the representative member.

5. Returns and payments

5.1 How do I account for the duty?

You must use the return form GD121 that the Cumbernauld Accounting Team (CAT) will send you. Returns are normally issued around 4 weeks before the end of each accounting period. If you lose, or do not receive your return, you can download a copy of form GD121 by visiting the HMRC website or phone the Excise and Customs helpline on Telephone: 0300 200 3700 immediately for a replacement.

5.2 What is an accounting period?

It is a period of 3 months normally beginning on 1 January, 1 April, 1 July and 1 October. If you wish to use different accounting periods, for example to match your management accounting periods, you can apply in writing to the CAT at the following address:

HMRC Banking
St Mungo’s Road
Cumbernauld
Glasgow
G70 5WY

If CAT agrees to your alternative periods, you may have variable start and end dates. However, they will still be about three months long.

If you do not apply for different accounting periods, or we cannot agree to your request, you must use the normal accounting periods. If we refuse to allow your different accounting periods, you can ask for a review of our decision. See section 9 for more information.

5.3 When must I send in my return and duty payment?

You must send both the return and payment together, to reach the CAT by the thirtieth day following the end of the accounting period that the return covers. Where the thirtieth day is not a business day (that is, a Saturday, Sunday or Public Holiday) your return and payment must reach the accounting centre by the last business day before the thirtieth day.

You must complete and send the return to the CAT even if you have not made any dutiable supplies of remote gaming during that accounting period.

HMRC recommends that you make payments electronically, rather than by cheque sent by post. For more information go to How to pay Remote Gaming Duty.

CAT must receive your payment on or before the return’s due date. Whatever payment method you use, you must make sure you have sufficient funds in your account to cover the payment.

5.4 Who is responsible for paying the duty?

Normally it will be the person registered with HMRC. In the case of a group registration this will be the representative member. However, where the person who provides facilities for remote gaming is a corporate body, each director legally has a joint liability with the company to pay any remote gaming duty due.

5.5 How do I pay the duty?

We accept payment by a range of methods but recommend that you use one of the following options:

1.BACS Direct credit Internet/Telephone banking or CHAPS - you will need to supply your bank or building with the following details:

Sort Code: 08-32-00
Account number: 12000911
Account name: HMRC GACA
Payment amount
Your remote gaming reference number (this must include the prefix ‘RG’)

(NOTE: Your reference number is made up of nine digits which you should find at the top of your duty return. When providing your reference please show it in the format PB/reference, for example RG/12345678 - (this reference is only an example and should not be used to make a payment)

2.By post - If you are unable to pay by one of the options shown above, you should send your cheque with your duty return to the address below. Cheques should be made payable to ‘HM Revenue & Customs only’ followed by your pool betting reference number.

If you do not have a pre-addressed envelope that we sent you, please send your payment to:

HMRC Banking
St Mungo's Road
Cumbernauld
Glasgow
G70 5WY

5.6 What happens if I have made a mistake on a return?

You could be charged a penalty if don’t take reasonable care with your tax affairs.

We can charge a penalty if your return or other tax document is inaccurate and as a result you don’t pay enough duty, or if you don’t tell us a duty assessment we have sent to you is too low.

This new penalty regime applies to return periods commencing on or after 1 April 2009 where the return is due on or after 1 April 2010.

For further information on the inaccuracy penalty please see the HMRC website.

5.7 How can I avoid a penalty?

You can avoid a financial penalty by checking that you have given complete and accurate information in your return.

If you are aware you have made a mistake on your return, please tell us as soon as possible. We will be able to reduce the penalty, in many cases to zero.

You have the right to appeal if we impose such a penalty (see section 12).

For further information on penalties please see the HMRC website.

For further information on appeals please see the HMRC website.

6. Calculating the duty

6.1 How do I work out how much duty to pay?

The duty is 15% of your remote gaming profits for an accounting period. Gaming profits cover all your gaming receipts, less winnings paid.

6.2 How do I calculate ‘gaming receipts’?

Include:

• the total value of stakes in games against the house (even those returned to players), and
• any other amounts due to you for the use of your remote gaming facilities. This will include charges made for participation in player to player gaming (the ‘rake’) or any other charges that are not stakes risked in the game

Exclude:

• amounts staked in player to player games, where the bank is held by the players rather than the house

6.3 Do I include receipts from players outside the UK?

Yes, if you:

• hold a remote gaming operating licence granted by the Gambling Commission
• have at least one piece of remote gambling equipment that is used in the UK

you must account for duty on all your relevant profits.

6.4 How do I calculate ‘winnings’?

Include:

• the total amount players receive as prizes during the accounting period
• stakes returned to players, and
• other amounts credited to players’ accounts (see paragraph 6.5)

You should not include amounts paid on behalf of one player to another player, for example on games where the players share the bank.

An amount credited to a player’s account can be counted as winnings once the player has been notified that the money is in his account and is entitled to withdraw it on demand.

6.5 How do I treat promotional schemes such as rake - backs or matched deposit schemes?

It is widespread industry practice for operators to offer incentives such as ‘matched deposit’ or ‘rake back’ schemes. These are aimed at both attracting new players to their sites and retaining existing players. These schemes usually take the form of crediting amounts to players’ accounts (bonuses) on condition, for example, that players stake a set amount in play, or deposit a certain amount in chip purchases.

Any stakes or payments for gaming made from a player’s account are defined as remote gaming receipts. It does not matter whether they come from funds deposited by the player or bonuses credited to the account by the operator. This may have the effect of distorting the duty calculation. In order to remove amounts credited to player accounts under ‘rake back’ and other incentive schemes from the duty calculation, you should treat such amounts as winnings.

However you should be aware that HMRC have the powers to disallow such credits where this is considered necessary to counter possible abuse of this provision.

6.6 How do I treat linked progressive jackpot games?

Special rules apply when games are offered simultaneously by more than one provider. This is where a portion of the player’s stake is put into a central jackpot fund to create the chance of winning a larger prize.

If you provide these types of linked progressive games you should include the full value of the player’s stakes in your receipts. You must also include any amount paid into the central prize fund in your winnings. Finally, exclude from your duty calculation any amount paid out as winnings from the central prize.

6.7 How do I treat non-cash prizes?

‘Prizes’ cover both cash and non-cash prizes. The following sections give advice on which figures you should include in your winnings.

6.7.1 Goods or services

If the prize is received from someone:

• unconnected with you - use the actual cost of the prize inclusive of any VAT
• connected with you – use the value the prize would have cost if it was obtained from an unconnected person. (Do not include the item if you cannot reasonably prove the value of the prize.)

6.7.2 Vouchers

Where the prize you issue is a voucher, which can be used in place of money for specified benefits, it must show the equivalent monetary value that the winner can use.

If the voucher is received from someone:

• unconnected with you - use the price you paid for the voucher
• connected with you - use the face value of the voucher

6.8 What if I make a loss during an accounting period?

If your gaming receipts, less winnings for an accounting period show a minus figure, you can carry forward this loss into the next accounting period. You need to show the loss in box 4 on the next return form GD 121. If necessary, this carry forward procedure can continue into the following accounting periods until you make a profit.

6.9 What if I make a mistake in my duty calculation?

If you find that you have under-declared the amount of duty due in an accounting period, you should add the adjustment figure into box 7 on your next return.

7. Records and accounts

7.1 What records must I keep?

If you provide dutiable remote gaming you must keep records and accounts necessary to work out the duty due. We will not tell you how you should keep your records. However, they must be in a format that you can easily produce if we ask to see them. We have the legal right to check your duty calculations and take copies of any records, accounts or other documents relating to the business.

Record keeping requirements are published in this notice as Directions under Regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992. These requirements are as follows:

The following rule has the force of law

Directions under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.
The person registered for remote gaming duty must retain for not less than three years, every account, record or other document used, or to be used by them, for the purpose of furnishing the particulars required by form GD 121.

8. Law

8.1 What is the law on remote gaming duty?

The principal law is contained in sections 26A to 26M of the Betting and Gaming Duties Act 1981, and the Remote Gaming Duty Regulations 2007. Remote gaming in Great Britain is also covered in social law, principally the Gambling Act 2005.

8.2 What is the overlap with social regulatory law?

It is the remote gaming duty legislation which determines the duty treatment. All the gambling duties are self assessed taxes and a taxpayer is obliged to calculate, notify, and pay any duty due. If a taxpayer has queries about their remote gaming duty, they should refer to guidance issued by us. We will answer individual queries from taxpayers, and if we give a ruling, then in some circumstances a taxpayer is entitled to rely on that ruling even if it is later shown to be wrong. However, a taxpayer is not entitled to rely on an opinion, or any guidance written by the social regulator, even if the opinion relates to an identical piece of legislation.

8.3 What provisions may attract penalties?

We may apply civil penalties, under section 9 of the Finance Act 1994, in a range of circumstances. These include failure to register, submit returns or pay the duty due, which can involve fines. Notice 209: Civil penalties: fixed geared and daily gives more information on this subject. You can download a copy of this notice by visiting the HMRC website or phone the Excise and Customs helpline on Telephone: 0300 200 3700.

For serious offences such as:

• fraudulent evasion of duty
• obstructing our officers

you may be liable to severe penalties, including imprisonment. It is therefore important that you ask the Excise Helpline if there is anything you do not understand or you require further information.

8.4 What if I fail to pay the duty that is due?

Whether remote gaming duty is due from you either in full or in part, we may order civil proceedings for recovery of the debt. In some cases we may advise the Gambling Commission about the matter.

9. Review and appeals

9.1 Are there any special decisions I can appeal against under remote gaming?

Yes. The review and appeals provisions are in sections 14 to 16 of the Finance Act 1994 and apply to remote gaming duty. They allow you to appeal against our decisions, as follows:

• your liability to pay remote gaming duty
• our refusal of an application for non-standard accounting periods
• whether or not we provide directions about transitional arrangements for accounting periods
• our registration requirements under the Remote Gaming Duty Regulations, and
• our request for security if a foreign person applies for registration

9.2 What if I disagree with any of your decisions?

If you disagree with our decision please write to us, with your reasons, within 30 days of our decision. There are 3 main options:

• if you have further information or you think we have missed something, please tell the person who issued the decision
• you can have your case reviewed by a different officer from the one who made the decision. If you decide to have your case reviewed you will still be able to appeal to the tribunal if you disagree with the outcome. If you want a review you need to write to us within 30 days of the date of the decision
• you can appeal direct to the independent tribunal within 30 days of our decision

You do not have to write to us yourself. An accountant or advisor can do this for you.

9.3 Where can I get more information?

You can find more information about reviews and appeals from our guide ‘Appeals against HM Revenue and Customs decisions’ or our fact sheet, HMRC 1 HMRC decisions - what to do if you disagree. You can download copies of these information sheets by visiting the HMRC website or phone the Excise and Customs helpline on Telephone: 0300 200 3700.

How we use your information

HMRC is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

• check the accuracy of information
• prevent or detect crime
• protect public funds

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HMRC unless the law permits us to do so.

For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

Gambling Duties Team
Excise, Stamps and Money Businesses
HM Revenue and Customs
3W, Ralli Quays
3 Stanley Street
Salford
M60 9LA

Complaints

If you are unhappy with the way we have handled your affairs (because of delays or mistakes, for example) please tell the person or office you have been dealing with. If they are unable to sort things out, ask for your case to be referred to the complaints team.

For more information about our complaints procedures, go to www.hmrc.gov.uk and under ‘quick links’ select ‘Complaints’.