UK free play tax dropped from government legislation

The UK Chancellor of the Exchequer has suspended plans to apply a levy to gaming free plays and bonuses, with the section referring to the tax omitted from the government’s latest Finance Bill, EGR Intel has learned.

The Bill was yesterday given its final reading in the House of Commons, as well as its first reading in the House of Lords, minus clause 67 which had in earlier versions detailed the levy – dubbed ‘PoC 2’ by the industry.

And a supporting piece of Finance Bill documentation confirmed the clause had been omitted by the Chancellor during the final Commons reading.

“The Chancellor of the Exchequer has given notice of his intention to oppose the questions that will be put from the Chair and that are listed below (with the effect that the provisions so listed would be left out of the Bill),” the supporting documentation read.

Among “the provisions so listed” to be “left out of the Bill” was clause 67. The updated Bill is expected to receive Royal Assent and become an Act early next month.

EGR Intel understands the clause, which was omitted among a number of others, was due to concerns the levy plans wouldn’t receive sufficient scrutiny prior to parliament being dissolved on 3 May ahead of the General Election on 8 June.

And although the tax is likely to be revisited following the election, news of its omission at this point will come as a relief to operators which had been busy planning for its implementation on 1 August 2017.

“I would imagine that, assuming that the Conservative party is re-elected, these provisions will be introduced in a second Finance Act after the election, since that is what usually happens in election years,” Olswang tax lawyer and partner Stephen Hignett told EGR Intel.

“However, even if they are included in a subsequent Finance Act, it may be that the new government will delay the commencement date.

“If there is a delay in the rules being introduced, this will give operators a little more time to ascertain exactly how the new rules should apply to their products and incentives.

“Given that HMRC’s published guidance is not as clear as we had hoped and their three examples are very simplistic, we are witnessing a great deal of uncertainty among clients as to how the rules apply to the very wide variety of products and incentives currently seen in the market,” he added.

Plans to introduce the tax were first announced by the previous Chancellor George Osborne in March 2016 and then reiterated by his successor Philip Hammond during his Spring Budget announcement last month.

The tax had been expected to raise £75m in its first full-year following implementation – Paddy Power Betfair recently estimated the levy would cost it £10m annually.

The UK Treasury had yet to reply to requests for comment at time of publication.