High Court refers UK POC tax regime to Europe

15 July 2015

The High Court of England and Wales has ruled the UK’s point of consumption (POC) tax regime must be referred to the European Court of Justice (CJEU).

In a judgement passed yesterday (Tuesday), Mr Justice Charles ruled in favour of the Gibraltar Betting and Gaming Association (GBGA), which has long been opposed to the POC tax regime that was introduced in the UK market last year.

The GBGA last year succeeded in delaying the launch of the regime but ultimately failed in its effort to have the laws halted, with the UK implementing the new regulations in December.

However, the GBGA said in March that it would return to court in a renewed bid to reverse the decision to introduce the new tax regime.

The GBGA, represented by law firm Olswang, has now secured a key victory in its ongoing battle after the High Court referred the case to the CJEU.

Olswang noted that if the CJEU rules the tax regime is in breach of European law, then Her Majesty’s Revenue and Customs (HMRC) could be forced to repay all of the POC tax it has collected.

The CJEU will consider a number of key points, including whether the aims relied on by the UK Government to justify the tax regime are actually legitimate.

“The case raises important questions for the future of online gambling in the UK,” Olswang head of public law Dan Tench said.

“It also touches on broader issues about the UK Government’s ability to tax businesses outside its jurisdiction.”

“We look forward to these issues being considered by the Court of Justice of the European Union.”

Meanwhile, the UK Gambling Commission (UKGC) has revealed further details regarding the performance of the UK gambling market for 2014-15.

The national regulator revealed its own income for the 12-month period amounted to just under £17.1 million (€24.3 million/$26.7 million), up from £13.3 million in the previous year.

Operator application fee income was up from £350,000 to £2.8 million, while miscellaneous income increased from £100,000 to £180,000.

The UKGC noted that betting remains its main source of income, accounting for 32% of total income.

The casinos sector contributed 25% to overall turnover for the UKGC, while machines and arcades were responsible for 18% and 11% respectively.

Lotteries and bingo completed the list with 8% and 6% of income respectively.

Related articles:

Gibraltar body renews bid to reverse new UK tax regime

UK gambling industry expands as new regulations come into force

UK Point of Consumption regime delayed until November