William Hill could be taking a BIG gamble by taking on Her Majesty’s Revenue and Customs Service, but then again taking BIG gambles is their business! The British Bingo industry has done this and won when Mecca went to European Union Supreme courts to support their contention that they were being over-taxed on ‘interval’ bingo games. It was worth the fight for Mecca (the Rank Group); we can’t remember the exact figure, but at the end of the day HMRS had to pay back over £36 million. This sum made a very nice difference to their bottom line in the year it was paid.
William Hill wants to challenge the Tax on "online" gambling profits – they are moaning about 15% – but we think they should count themselves lucky, this is what land operators have to pay out, and land bingo operators are required to pay out even more. 15% is the proposed tax level for online gambling businesses, and quite honestly, as they have had to pay no tax at all for more than ten years in the biz, what the heck is their problem?
We’ll tell you what their problem is – In the 2012 half year report, William Hill profits reached a whopping £68.9 million just for their online business. Who wants to pay out 15% of money like that, when they have previously needed to pay nothing at all? Taxation for this industry in the UK is only planned to fall due from the end of 2014, when the Chancellor of the Exchequer wants to raise approximately £200 million from online betting. We would assume that this amount also includes revenues from other forms of Internet gambling enterprises.
Virtually all of the large bookmaking and other gambling firms in the UK, which offer online services have moved operations to offshore sites such as Malta, Gibraltar, Alderney and Isle of Mann, in order to escape UK taxes. But if we think about it logically, while they are offering services to a UK audience and earning profits from this, surely they should be subject to some sort of taxation. We have to remember that there are only two sure things in life – one is death, the other is taxes, and there is no escaping the facts.
The company has already briefed their lawyers to build a case against the proposed taxation, which will be a "point of consumption tax". Lawyers that specialize in gambling law have warned that under European Law it is illegal to restrict free movement of goods or services for tax purposes, but this has not stopped countries such as Belgium and other European countries from jealously guarding their online gambling borders. Whether William Hill will be successful or not, based on these precedents and what has become tacit, remains to be seen. But whatever happens in the end, it seems that William Hill is taking no chances, and just like Baden Powell taught the Scouts – we should always be prepared.