Notice

Excise Notice 455a: Remote Gaming Duty

Updated 16 December 2014

Foreword

This notice concerns Remote Gaming Duty (RGD) from 1 December 2014. Notice 455: Remote Gaming Duty dated April 2010 remains in force for RGD prior to 1 December.

Certain paragraphs within this notice have the force of law under:

  • The Finance Act 2014 (the Act)
  • The General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 (Statutory Instrument (SI) 2014/2257) - (Registration Regulations 2014)
  • The General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 (SI 2014/2912) - (Returns Regulations 2014)
  • The Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150)

Text in this notice which has the force of law is indicated by being placed in a box. See example below.

Example of ‘force of law’ text

Text showing in boxes has the force of law

Further information about RGD and guidance to help you comply with your obligations can be found on the GOV.UK website.

Terminology

For the purposes of this notice the terms below have the meanings specified:

  • gaming provider: a gaming provider is a person with whom a customer contracts (or enters into other arrangements) to participate in remote gaming
  • customer: someone who plays a game
  • remote gaming: the playing of a game of chance for a prize by remote means (for example, over the internet)
  • UK: United Kingdom (this does not include the Isle of Man, the Channel Islands or Gibraltar)
  • we/us: HM Revenue and Customs (HMRC)
  • GTS: Gambling Tax Service refers to HMRC’s gambling tax system - an electronic online service for registration, submitting duty returns, etc
  • Remote Operating Licence (ROL): a licence issued by the Gambling Commission - see section 67 of the Gambling Act 2005
  • gaming prize fund: a fund to which payments for remote play are assigned and from which winnings are paid out

1. Introduction

RGD is charged on a gaming provider’s profits from customers who usually live in the UK.

The government has reformed RGD, General Betting Duty (GBD), and Pool Betting Duty (PBD) so that these duties apply on a ‘place of consumption’ basis. In other words, remote gambling operators pay UK gambling duty on their gross gambling profits no matter where in the world the operators are located.

This notice is only concerned with RGD. Please see Notice 451a: General Betting Duty for GBD and Notice 147a: Pool Betting Duty for PBD.

2. Definition of ‘UK person’

A UK person is defined for these purposes at section 186 of the Act as either:

  • an individual who usually lives in the UK
  • a body corporate which is legally constituted in the UK

We have the power to make statutory provision in a notice about how to determine whether a customer is or isn’t a UK person. We have used this power below.

The following has the force of law made under section 186 of the Act

HMRC specifies that, where it’s relevant for the purposes of establishing liability for RGD whether a customer is or isn’t a UK person, the following steps must be taken.

Step 1

1.1. Gaming providers must keep appropriate records to enable them to verify whether customers are UK persons (that is, whether they usually live in the UK) or whether they usually live outside the UK. Gaming providers have a responsibility to keep their records on customer location up to date. These records must be capable of audit by HMRC.

1.2. All gaming providers should initially require their customers to state the address at which they usually live at the time the customer registers to play with the gaming provider. If no address is given the customer will be regarded as being a UK person.

1.3. When a UK address is given, the customer is regarded as being a UK person.

Step 2

2.1. If a customer gives a non-UK address, gaming providers must verify the customer’s declared location by reference to other information in their systems. It’s not acceptable for gaming providers to simply accept assertions from customers about where they live.

2.2. In cases of a verification system returning a conflicting result, with some information indicating the customer is a UK person and other information indicating the contrary, then the following tests should be applied.

2.3. Gaming providers should consider the customer’s statement that they don’t live in the UK against all other information they hold about the customer (for whatever reason it has been collected). If 2 current pieces of information indicate a UK address then the customer will be determined to be a UK person regardless of their statement that they live elsewhere. Typical information items will be the customer’s:

  • address on a bank statement
  • address associated with a credit card
  • address on their driving licence
  • contact phone number and the country code attached to it

2.4. If any 2 or more of these information items are known to the gaming provider and they return a result as the UK then, irrespective of whether the customer has provided an address outside the UK, they must treat that customer as a UK person for the purposes of gambling duties taxation. This is known as the ‘Two UK Indicators Rule’.

We’re not prescriptive about what the information at step 2.1 above should be or how many information items should be collected. We expect a robust system to have in-built verification but are not prescriptive about what that verification has to be.

Where the steps specified above also concern record keeping, statutory provision is made at Section 8 below.

2.1 RGD calculations

2.1.1 RGD rakes taken from a fund or pool

Where poker or other pooled gaming includes only UK players, duty is due on the whole rake.

Where poker or other pooled gaming (also known as peer to peer gaming) includes both UK and non-UK players, you must apportion the rake accordingly. There are 3 basic methods to calculate how much duty is due on the rake. You must use the one which is appropriate to your situation.

As an alternative you can use ‘actual values’ providing you follow the principles set out at (4) below:

These methods are:

  1. Where the rake taken is in relation to a game or games, the amount liable to duty is calculated by multiplying the total rake removed from the gaming prize fund by the UK stakes (this is the total paid by people who usually live in the UK) for the game or games, as a proportion of total stakes (UK and non-UK) for the game or games.
  2. Where the rake taken relates to a period of time, the amount liable to duty is calculated by multiplying the total rake removed from the fund by the UK stakes for the same period of time as a proportion of total stakes (UK and non-UK) over that period of time.
  3. Where the rake relates to something other than a game or games and a period of time, the amount liable to duty is calculated by multiplying the amount of the rake removed from the fund, by all the UK stakes received over the life of the fund up to the point in time the rake is taken as a proportion of all stakes for the life of the fund (UK and non-UK).
  4. HMRC is aware that it is common practice in the industry to recognise that certain players are more valuable than others to the network (and hence to operators) and to weight rakes in respect of the individual players accordingly. HMRC will allow weightings to be used in respect of individual players provided:
  • they’re made prior to the rake being taken from the fund
  • they’re applied consistently
  • no adjustments are made on the basis of whether a player is a UK player or not and no deductions from the fund may be made for anything other than rakes or winnings, for example, any fees for management of the network must be made from tax paid income

2.1.2 Top up amounts to a fund or pool containing both UK and non UK players

If you add additional winnings into a pool this will reduce your duty liability. You must use the same proportion (as above) that you used to calculate your duty liability.

3. Registration

3.1 Registration applications

All gaming providers liable to RGD must be registered with HMRC. Applications for registration must be made at least 31 days before the start of the gaming attracting liability. This is reduced to 14 days in advance for businesses based in the UK, EU, Gibraltar, the Isle of Man, Norway, the Faroes, Iceland, New Zealand or South Africa.

Important note: the prescribed electronic method must be used. For RGD, there’s no option to register using a paper form.

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 164(3)(a) of the Act

The applicant must:

Step 1

Set up a Government Gateway account (if not already set up) by following all prompts.

Step 2

Access the GTS using the Government Gateway.

Step 3

Complete the application in full through the GTS and follow all prompts.

Step 4

Keep records of the on-screen automatic acknowledgment confirming completion of the registration application, together with the unique acknowledgment reference number.

3.2 Changes to information given at registration

You must tell us about any changes to, or inaccuracies in, the information supplied on your application for registration within one month of the date of registration or within one month of the changes or inaccuracies happening (whichever is the later).

Below we have made statutory provision in relation to this.

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 164(3)(d) of the Act

Notification of changes to application for registration

The applicant (or, if the application has been accepted, the registered person) must notify HMRC of any changes or inaccuracies in the information supplied on their application for registration by making the changes through the GTS Online Service.

3.3 Group registration

A group may be formed by corporate bodies under common control. The group must appoint a Group Lead Member (GLM). The GLM must have a principal place of business in the UK.

The common controller itself need not be registerable for RGD.

A corporate body can only join a group registration for RGD if the corporate body itself is registerable for RGD.

All members of a RGD group are jointly and severally liable for all other group members’ RGD liabilities. The GLM must obtain from all prospective group members written confirmation that they consent to joining the group. All prospective group members must confirm to all other (prospective) group members that they understand the position on joint and several liability.

A RGD group registration is only valid for RGD. Any liability to another gambling tax needs a separate registration for that tax.

3.4 How to apply

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 164(6) and (7) of the Act

To register online, the GLM must:

Step 1

Set up a Government Gateway account (if not already set up) and follow all prompts.

Step 2

Access the GTS using the Government Gateway.

Step 3

Complete the application in full (including any supplementary information in respect of group treatment) through the GTS and follow all prompts.

Step 4

Keep records of the on-screen automatic acknowledgment confirming completion of the registration application, together with the unique acknowledgment reference number.

3.5 How to change group registration information

The GLM must tell us about any changes to, or inaccuracies in, the information supplied on the application for registration within one month of the date of registration or within one month of the changes or inaccuracies happening (whichever is the later).

Below we have made statutory provision in relation to this.

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 164(6) and (7) of the Act

Notification of changes to application for registration

The GLM must notify HMRC of any changes or inaccuracies in the information supplied on their application for registration by making the changes through the GTS Online Service.

3.6 Deregistration

If you wish to deregister you must notify us as set out below.

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 164(3(e) of the Act

If a registered person (including a group) ceases to be liable for RGD (or, in the case of a group, if the members cease to be eligible to form a group) they must notify HMRC confirming:

  • that they’re registered for RGD including their registration number
  • the date from which deregistration should take effect
  • that after the date of deregistration they will not be engaging in activities liable to RGD

Deregistration notifications must be sent through the GTS Online Service.

You’re strongly advised to submit your deregistration notification within the 14 days before liability ceases. If liability has already ceased, you must submit your deregistration notification within one month from the date your liability ceased. HMRC may charge a penalty for failing to tell us about this on time.

4. Accounting periods

Returns must be made after the end of each accounting period in respect of activity during that period. An accounting period is sometimes referred to as a ‘return period’.

A standard accounting period is 3 whole calendar months starting on the first day of the first month and ending on the last day of the third month.

The following direction has the force of law made under section 165(2) of the Act

HMRC direct that each standard accounting period starts on the first day of a calendar month. This does not preclude non-standard accounting period arrangements being agreed under section 165(3) of the Act.

In the event of a person becoming registered for RGD part way through a calendar month, that person’s first accounting period begins on the date of registration.

Non-standard accounting periods

Section 165(3) of the Act allows HMRC to agree with individual gaming providers that they may follow non-standard accounting periods.

HMRC will only agree to non-standard accounting periods if the gaming provider:

  • first selects a pattern of accounting periods based on four 3 month periods in 12 months each ending on the last day of a month
  • then selects 8 non-standard period end dates (each period end date must be within 16 days before or after the date that would have been the standard end date)

If the gaming provider wishes to continue with non-standard accounting periods after the end of the eighth period he should, during the seventh period, give HMRC a further 8 non-standard period end dates.

5. Duty returns

If we don’t receive your returns by the due date we may impose a ‘late filing’ penalty.

The due date for each return is the 30th day following the end of every accounting period. If the 30th day isn’t a business day, the return must be received by the last business day before that day.

In this notice, ‘business day’ means any day except:

  • Saturday, Sunday, Good Friday or Christmas Day
  • a bank holiday under the Banking and Financial Dealings Act 1971
  • a day appointed by Royal proclamation as a public fast or thanksgiving day
  • a day declared by an order under section 2(1) of the Banking and Financial Dealings Act 1971 to be a non-business day

5.1 How to submit returns

Below we have made statutory provision in relation to RGD returns.

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 made under section 166 of the Act

A gaming provider liable to make RGD returns (as someone who holds or is required to hold a Remote Operating Licence (ROL)) must use the GTS to make those returns.

Nil returns:

The gaming provider must submit a RGD return even if they don’t have any dutiable profits.

5.2 Under-declarations

If you realise you have made a mistake on a return or returns which have resulted in you declaring to us less than you actually owe, you must correct that error by one of the following 2 methods:

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 made under section 166 and section 167 of the Act

Method 1

Write to HMRC about the error. The postal address can be found at Customs International Trade and Excise where the address is provided under the heading ‘post’.

Use this method for errors of any size. The letter must detail the amount of the error and the circumstances in which it came about. The amount you owe as a result of the under-declaration must accompany the letter.

Method 2

Enter the amount of the under-declaration in the relevant box on the next RGD return.

Only use the relevant box if the overall amount of the under-declaration:

  • doesn’t exceed £10,000 (net value)
  • doesn’t exceed £50,000 (net value) and will not be more than 1% of the gaming provider’s total profits in the accounting period during which the error was discovered
  • the error wasn’t caused because of lack of reasonable care

We may wish to look into the circumstances in which the under-declaration came about and we may impose a penalty.

6. Payments

If we don’t receive what you owe by the due date we may impose a penalty on you.

The due date is the 30th day following the end of every accounting period. If the 30th day isn’t a business day, it must be received by the last business day before that day. See Section 5 above for more information about business days.

6.1 How to pay

The following has the force of law under the General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 made under section 167 of the Act

HMRC prescribes that payments must be made by one of the following methods:

Method 1:

Electronically by Bacs, CHAPS or Faster Payments, or by credit/debit card payment from a UK bank.

Method 2:

By post.

Payment maybe by means of a cheque made payable to: ‘HM Revenue and Customs only’ followed by the appropriate RGD registration number and sent to:

HMRC Banking
Bradford
BD98 IYY

Method 3:

By SWIFT (for payments from overseas).

The GOV.UK website provides further information about how to make a payment.

Payment of RGD can’t be made by Direct Debit.

6.2 Joint and several liability

HMRC can recover any unpaid duty from the holder of a ROL for the business which provided the gaming to the customers on which the tax is due.

HMRC won’t recover duty from any other operating licence holders who may be involved with the provision of gambling services to the gaming provider.

If the gaming provider is a company, HMRC can recover any unpaid duty from the directors of that company.

6.3 Interest

Late payment interest accrues if you’re late in paying what you owe. Late payment interest is calculated on the outstanding duty from the date the amount became due and payable to the date the amount is actually paid.

Repayment interest accrues when appropriate.

Late payment and repayment interest is calculated on a simple (not compound) basis. This means that interest is only calculated on the amount of the tax or penalty (late payment interest only) and not on interest that has already been charged or accrued.

7. Cryptocurrencies

The following has the force of law under section 191(2) of the Act

The value of any amount in any cryptocurrency is the sterling value of the amount at the point the transaction (that is, the payment) takes place.

A record of all relevant checks and transactions must be kept.

For each transaction, the following records must be kept:

  • the amount of the transaction in cryptocurrency
  • the date and time of the transaction
  • the sterling value of the cryptocurrency on that day

The exchange which is used to provide a sterling value must not be a connected company. A ‘connected company’ is to be determined in accordance with Section 1122 of the Corporation Tax Act 2010.

8. Record keeping

Anyone who is a ‘revenue trader’ must keep records for the purposes of RGD. The term revenue trader covers anyone who carries on a trade or business as a gaming provider and anyone carrying out the management or administration of a gaming prize fund.

Notice 206: revenue traders’ records explains the general record keeping requirements which apply to revenue traders. In summary, a revenue trader must keep all business records and an excise duty account as an audit trail to support all figures entered on each return. A gaming provider must retain all business records for the purposes of RGD for 4 years.

8.1 Access to records

All revenue traders must provide us, on request, with information and documents from the records. We may specify the place where information and documents are to be made available, but this place will always be somewhere in the UK (and may be a business’ principal place of business if this is in the UK).

Under our powers we require that the additional records are held and made available as follows:

The following has the force of law under Regulations 6 and 8 of the Revenue Traders (Accounts and Records) Regulations 1992 and the General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 made under section 168 of the Act

1. All gaming providers liable to RGD must keep:

An Excise Duty account to be known as the ‘Remote Gaming Duty account’. This must summarise by accounting period the information required to complete RGD returns.

2. Payments to play received and prizes paid out

What records must be kept:

  • a record of all payments to play received (whether received direct from the customer or through another party)
  • a record of all prizes paid out

3. Non-cash prizes and free/reduced-cost bets

What records must be kept:

  • details of the circumstances in which prizes which are not cash or cash equivalents are given out, and the value of such non-cash prizes
  • details of any offers of free or reduced-cost play, the take up and use of such offers, and the value had the full amount been paid

4. All gaming providers liable to RGD must keep the following:

  • all information received which is relevant to determining whether or not a person is a UK person
  • in support of Step 1 of the process for determining whether a person is a UK person, each address submitted by or on behalf of the person as being where they usually live, and the date of receipt of the information by the gaming provider
  • in support of Step 2 of the process for determining whether a person is a UK person, all information used to verify that a person is not a UK person, and evidence that this information has been considered to establish whether or not there are 2 indicators that the person usually lives in the UK

5. The manager or administrator of a gaming prize fund must keep

  • records of amounts assigned to or otherwise paid into the fund, from whom they are received and whether or not they’re in respect of amounts paid by a UK person
  • records of amounts paid from, or otherwise deducted from the fund and to whom they are given

6. Records must be retained as follows:

  • all records used or created in the course of the gaming provider’s business, or used for the purpose of completing duty returns must be stored in a readily accessible form and manner for at least 4 years unless an exception below applies
  • all papers or other media used to record winning play must be stored in a readily accessible form and manner in daily batches for a period of 6 months after the date when the winnings were paid out or notified as payments to customers’ accounts
  • all papers or other media used to record other play must be stored in a readily accessible form and manner in daily batches for a period of 6 months after the date when the payments to play were made
  • all other records, documents and accounts including, but not limited to:
    • trading and profit and loss accounts
    • balance sheets, customer and bank statements

used or created in the course of the business, or used for the purpose of completing duty returns, must be stored in a readily accessible form and manner for at least 4 years

7. Determining the 4 year period

7.1 Documents that record individual events

Records such as invoices should be retained for 4 years from the date of issue, but if they refer to a future event they must be retained for 4 years from that future date.

7.2 Documents that record a summary

Records such as a balance sheet or trading account should be retained for 4 years from the date they are prepared.

7.3 Documents that record a series of events:

  • records such as ledgers, daybooks or stock books which are kept in bound books, should normally be retained for 4 years from the date of the last entry made in the bound book
  • records maintained in loose-leaf binders, on cards and so on, should be retained for 4 years from the date of the last entry on the loose leaf record
  • records kept in an electronic format, are to be treated the same way as paper records
  • HMRC may in writing agree different periods with individual taxpayers in cases of genuine difficulty

8. Making records available to an Officer of HMRC

8.1 Gaming providers liable to or likely to become liable to RGD and those providing facilities for gaming providers to carry out their business must make available to an Officer of HMRC any information or documents which that Officer reasonably requires. The information must be made available at a time and place that the Officer reasonably requires.

8.2 Information won’t be considered to have been made available to an Officer of HMRC unless:

  • in the case of computerised records and recording systems:

(a) the Officer is provided with access to computer records/systems through a computer in the UK and sufficient support is made available to the Officer to enable that Officer to navigate the records/systems and a printing facility is provided, and/or
(b) the Officer is provided in the UK with data extracts following parameters set by the Officer (for example: date ranges) in hard copy or in a Microsoft Excel compatible format

  • in the case of paper-based record keeping the Officer is provided with access in the UK to paper records
  • in the case of a gaming provider who has appointed a fiscal or administrative representative, information or documents reasonably required must be made available through that representative unless agreement is reached with HMRC for some other access arrangement

HMRC won’t accept electronic data other than in a Microsoft Excel compatible format.

Important note: each gaming provider registered for RGD has a records requirement attached to that registration. This is clearly stated on the certificate of registration sent to each gaming provider and is as follows:

“It is a requirement attached to this registration that you make information to support what you tell us on your returns (as listed in section 8 of Notice 455a: Remote Gaming Duty) available in the UK to an HMRC Officer on request. If the business does not comply with this requirement, HMRC can require that any Gambling Commission Remote Operating Licence held is revoked.”

8.2 Records held regarding liability before 1 December 2014

Nothing in paragraph 8.1 above affects records in respect of liability before 1 December 2014. Such records must be kept in accordance with Notice 455: Remote Gaming Duty (edition April 2010).

8.3 Record keeping for a shorter period

If you have a problem with record storage, you can ask HMRC for a dispensation to keep some of your records for a period shorter than 4 years.

9. Transition

9.1 Previous RGD registration

If we had previously registered you for RGD, or if your registration application was being processed, (under Sections 26A to 26M of the Betting and Gaming Duties Act 1981), and you had not subsequently notified us that your dutiable activities had ceased, special transitional rules applied in respect of registration.

We wrote to you and requested additional information. You had to supply that information for us to then register you under the new arrangements. The obligation to provide that information continues to apply to those who didn’t comply at the time.

The legislation on this is in regulation 5 of the Registration Regulations 2014.

9.2 Registration deadlines

The normal deadline for applying for RGD registration from 1 December 2014 is set out above at paragraph 3.1.

The following transitional rules applied in the period to 1 December 2014 and continue to be valid for those who didn’t comply with their obligations at the time.

No previous registration

If a gaming provider has not previously applied to HMRC for registration for RGD or has previously applied to HMRC for registration, but has subsequently notified HMRC that their business has ceased and intends to carry out activities after 1 December 2014, which would attract liability to RGD the gaming provider is advised to apply for RGD registration before 1 December 2014.

If you’re in the situation described above, you’re strongly advised to apply for registration as soon as possible.

9.3 Accounting periods

The following has the force of law under section 165(4) of the Act

1.Transitional provision - standard accounting periods

(a) transitional provisions apply to accounting periods allocated in respect of successful registration applications before 1 December 2014

(b) in the case of successful registration applications before 1 December 2014:

  • the start date for the gaming provider’s first accounting period will be 1 December 2014 and the end date will be 31 March 2015
  • the start date for the second standard accounting period will be 1 April 2015 and the end date will be 30 April, 31 May or 30 June

(c) all subsequent standard accounting periods will cover 3-monthly calendar periods

2. Transitional provision - non-standard accounting periods

HMRC may agree to non-standard accounting periods for the transition period.

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to Your Charter.

Do you have any comments or suggestions?

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

HM Revenue and Customs
Gambling Duties Team
Indirect Taxes
3W, Ralli Quays
3 Stanley Street
Salford
M60 9LA