The UK's HMRC lays out new tax bands for gaming revenue

Gross gaming yield (GGY) will have greater taxes applied to them, according to the UK tax authority, Her Majesty's Revenue and Customs (HMRC), which will apply to land-based casino earnings. The new tax bands will be instituted as of April 1 of next year as the HMRC aims to keep casino operations in line with real inflation levels.

Ever since 1997, and as amended last year, HMRC applies tax bands from 5% to 50% on casino GGY of £2.5 ($2.7 million) to £13.8 million ($19 million). The review, which will be applied to the Finance Bill for 2021-2022, will include tax bandings applied of 15% for the first £2.6 million ($2.8 million) and with a limit of 50% for GGY of over £14.6 million ($20 million).

In the proposal, it is stated that this measure will make sure that the gaming duties required from casino operators are kept up to date. According to the HMRC, if the bandings are not increased at the inflation rate, over time, the GGY would have even higher ratings.

These revised tax bandings will not have a significant economic impact or any in the tax estimates of the Exchequer, according to the tax authority. They should also not have any real effect on casino prices and payouts for clients

These new tax bands will be enforced as of next year because brick-and-mortar casinos in the UK are a sizeable part of the economy and provide jobs for many people. Because they accumulate millions in revenue, they have to be taxed accordingly.

Due to the COVID-19 pandemic, land-based casinos in the UK suffered from closures, and the overall casino tax revenue for the tax year of 2020-2021, including online and offline venues, went down by 6%. However, casino taxes for land-based casinos revenue fell by 62%, while online casinos had a 25% increase.

The UK has 50 brick-and-mortar casinos distributed throughout its territory, and the tax band revision is part of the updated Finance Bill.

Part of this is due to the rebound after the COVID-19 pandemic, which means that land-based casinos will take some time to recover. In order to help them come back, the Betting and Gaming Council (GMC) announced a "budget for jobs," according to Chief Executive Michael Dugher.

The new tax bands are an improvement because, if they were not reviewed to cover inflation rates, the income from this would be even greater in the future.

Image source: UnSplash.com