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Statutory context of the relevant provisions of Part 3 Chapter 3
Statutory context of the relevant provisions of Part 3 Chapter 3
We start by summarising the shape and structure of Part 3 FA14 to set the context for Chapter 3. Part 3 provides the statutory infrastructure for the taxation of remote gaming. FA14 does not provide the statutory infrastructure for casino gaming which is taxed pursuant to sections 10 – 15 Finance Act 1997 (FA97). Pursuant to section 11 FA97 gaming duty (GD) is charged on premises providing dutiable gaming. It is charged on the “gross gaming yield” which consists of the aggregate of gaming receipts (i.e. charges made in connection with dutiable gaming) and the banker’s profits (the difference between money or money’s worth staked with the banker less the value of prizes provided by the banker to those taking part in gaming).
Chapter 1 concerns general betting duty (GBD). GBD applies based on where the customer is located, not where the bookmaker is based. It is charged at a set percentage of the bookmaker’s profits from general bets. Profits are calculated as the total amount staked by customers, minus the amount paid out in winnings. When calculating the total amount staked, where the person who makes the bet does so pursuant to an offer which permits the person to pay nothing or less than the amount which the person would have been required to pay without the offer, the amount which would otherwise have been staked is liable to be included in the profits calculation.
Chapter 2 similarly provides for pool betting duty i.e. betting where all the stakes are pooled together and the winnings are shared among the winners, rather than being paid at fixed odds.
Chapter 3 concerns RGD and we shall turn to consider the detail of this chapter shortly.
Chapter 4 provides for the administration of GBD, pool betting duty and RGD including the requirement for providers to register, accounting periods, returns, payments, information, and records etc.
The structure of Chapter 3 is as follows:
Section 154 defines remote gaming.
Section 155 prescribes that RGD is charged on the profits of a gaming provider on the participation in remote gaming by a person (natural or legal) in the UK. The profits so chargeable are the aggregate of the profits on pooled prize gaming, ordinary gaming and retained prizes (defined and calculated in accordance with sections 156, 157 and 158 respectively).
The basis of calculation under each of sections 156 – 8 is broadly to aggregate the amounts received/to which the gaming provider becomes entitled and deduct where relevant, the aggregate value of prizes (and other permitted adjustments). Section 157 specifies that profits from ordinary gaming are the difference between “the aggregate of the gaming payments made to the provider in the accounting period in respect of ordinary gaming” and “the amount of the provider’s expenditure for the period on prizes in respect of such gaming”.
In summary section 159 provides the basis of determining what a gaming payment is, when it is deemed to be received and its value. Section 159A excludes, through two routes, certain sums from the scope of section 159.
What constitutes a prize/the amount expended in connection with prizes for the purpose of the profits calculation are set out in section 160 with section 160A specifically providing for the exclusion of certain prizes from the profits calculation.
Section 161 provides for certain exclusions and section 162 imposes the liability to pay RGD on the gaming provider.
As is apparent from the summary provided, Chapter 3 is part of a legislative infrastructure whereby betting, gambling, and gaming activity undertaken by those in the UK will be subject to tax. The duty is charged in each case on the profits of the gaming provider as defined.
The parties agree that the MR Spin is a game of chance in which UK persons participate by way of the internet. As such it is remote, ordinary, gaming meeting the definition provided for in section 154.
Waiver Part
Having set that context we move to interpret section 159(4) in the context of an MR Spin.
- Heading
- Introduction
- Evidence and findings of fact
- Mega Reel
- Assessment
- Relevant legislation
- The issues
- Liability issue
- Parties’ submissions
- Discussion
- Statutory context of the relevant provisions of Part 3 Chapter 3
- Parties submissions
- Discussion
- Parties submissions
- HMRC’s submissions
- Discussion
- Validity issue
- Discussion
- Conclusions