UK Seeks New Gambling Tax Increase to Cover Budget Issues
The UK Treasury is reportedly revisiting the option of increasing gambling taxes as part of a strategy to address persistent budget shortfalls. According to recent reports, the proposal is among the more politically feasible options being explored ahead of a challenging fiscal period.
LISTEN TO THIS ARTICLE:Chancellor of the Exchequer Rachel Reeves is under pressure to identify new revenue streams that do not involve raising income tax, VAT, or employee national insurance. These are measures she ruled out prior to the 2024 General Election.
Related: UK Government May Introduce Single Remote Gambling TaxSources suggest the Treasury views a gambling tax increase as one of the more palatable choices for raising funds, particularly given the current fiscal constraints. This potential tax hike could align with an ongoing plan to streamline the UK's gambling tax system, which presently includes multiple betting duties ranging between 15% and 21%.
A consultation launched in April aimed to simplify this system by unifying the rates under a single standard percentage. Given the broader context of tight public finances, it is widely expected that this unified rate would align with the higher end of the existing range.
The concept of consolidating gambling taxes is not new. The Treasury had already been exploring significant increases in this sector ahead of the last budget in October 2024. At that time, discussions reportedly included proposals for up to £3 billion in new tax revenue from the gambling industry.
A report from the Institute for Public Policy Research (IPPR), a left-leaning think tank, had outlined a plan to increase the general betting duty from 15% to 30%. It also suggested raising the remote betting duty to 50%, with these rates tied to a new scale based on the potential harm caused by specific gaming products.
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Final Decision Yet to be Made
While there has been no official confirmation on whether these proposals will be adopted, the government's continued interest in overhauling the gambling tax regime suggests that some level of restructuring remains likely. The extent and design of any future tax increase, however, remain uncertain. The Treasury's aim to simplify the tax framework could influence the implementation of new rates or the way harm is assessed and taxed within the gambling sector.
Industry stakeholders have expressed strong opposition to the proposed changes. The Betting and Gaming Council (BGC) criticized the tax proposals as lacking credibility and grounded in unrealistic economic assumptions. According to the organization's leadership, additional tax burdens could significantly impede growth within the sector, potentially resulting in job losses and negative ripple effects on related industries, particularly horseracing.
The British Horseracing Authority (BHA) has also reacted strongly to the prospect of a tax hike, especially one targeting remote gambling. It has initiated a campaign titled "Axe the Tax" aimed at blocking the unification of remote gambling duties. The BHA argues that such reforms could damage the financial stability of horseracing, which relies heavily on betting-related revenues for funding and operations.
Despite the opposition, the Treasury is continuing its review of tax reform options, including those that could affect the gambling industry. The outcome of this review will likely shape the future regulatory and economic landscape of the UK's gambling market.
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