Casino operators pay gaming duty on their gross gaming yield from games that take place in UK premises. Currently, they must file two returns and make two payments of gaming duty in each six-month accounting period, making a payment on account after three months and a balancing payment after six.
HMRC said under the current system it was possible for the payment on account to exceed a casino’s eventual liability after six months – for example if customers had a winning streak in the second three months of the accounting period.
However gaming duty has no provision to carry losses forward into the next accounting period, meaning casinos cannot use a loss in one six-month period to reduce future liabilities.
The government proposed three alternative accounting periods in the consultation paper (14 page/264KB PDF). Its preferred option was a three-month period, which would bring gaming duty into line with the administration of several other gambling duties. This shorter period would also get rid of the requirement for payment on account, and losses could be carried over into the next accounting period.
The second option set out in the consultation was to maintain the current six-month accounting period, but get rid of payment on account. This option would allow casinos to carry losses forward into the next accounting period.
The final option was to introduce a 12-month accounting period. HMRC said it would need to retain payment on account due to a cash flow cost for the Exchequer. It added that a 12-month period was also likely to introduce administrative burdens, complexity and uncertainty.
Gaming expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law.com, said reducing the burden on casinos would be welcomed.
“If the consultation achieves its aim by ensuring that the administrative burden for casinos is reduced and so the system is more effective, efficient and simpler, this will be a good thing for operators,” Rees-Gay said.
“The preferred option of moving to a three-month accounting period will mean that more returns will be needed. However, this burden will be offset by the provision to carry forward losses to offset future liabilities and there no longer being the need for monies to be paid on account,” Rees-Gay said.
The consultation closes on 4 June.