Gambling, including remote (online) gambling, has been a growing business sector in the last decade and is a lucrative business. In the UK, gambling establishments are fully legal and the market is large enough, so it is an interesting and promising area for businessmen. The principles of registration and subsequent taxation are laid down in the laws in some detail, but they should be understood in advance.

But most importantly: can UK punters bet outside the UK? Yes, can. And that’s what we’ll find out “why” later in the article.

Taxation in the UK

With land-based offices it is simple. Once located in the UK, they have to be registered and pay taxes. However, the digital segment of the industry is also of interest to local tax authorities.

Since 2012, the rule has been in place that trading profits from remote gambling are subject to UK tax if derived within the country. A place of consumption rule has been introduced – UK offices do not pay a percentage of overseas profits to the budget, but foreign casinos are required to deduct the crown if they entertain citizens or visitors to the country.

Payment of taxes by players and game options

The law prescribes that taxes must be paid on all money received from people who gamble in the UK. Accordingly, the bookmaker or online provider is obliged to check the whereabouts of the clientele, and regularly. The data collected is checked by a monitored body, HMRC, with which the office registers if it wants to do business in the UK legally.

The entertainment provider must ask the customer for their residential address at the time of registration. HMRC will treat “offenders” as UK residents and claim tax on their deductions.

The customer’s answer alone cannot be regarded as a priori reliable information – the provider must check that what is stated is true. At a minimum, IP identification is used for this purpose and some representatives also require authorised devices to set up passports and registrations. Additional sources of information to which the data goes in case of uncertainty include bank account addresses or linked credit cards as well as the national prefix of a contact phone number.

For customers whose whereabouts after all indicators cannot be established, the UK two indicator rule applies. Any two sources that indicate the location of the customer within that state will entitle the tax authority to be deemed to have confirmed and claim the tax.

There is increasing talk in the parity betting community about whether those outside the UK and Ireland should do so. People can often face obstacles in accepting negotiated bets or free spins from casinos because their country is restricted to a particular bookmaker or casino. These people also don’t have easy access to a UK address to get around this problem.

Fortunately, there are plenty of overseas bookmakers and online casinos that accept users from overseas, with no UKGC or GamStop restrictions for Brits. For those looking for the best sports betting sites not on GamStop, is here to help.

What are the best bookmakers for betting abroad?

You’ll be pleased to know that some of the top bookmakers in the UK and Ireland also allow you to bet on sports in other countries. Companies like bet365, Ladbrokes, and William Hill allow European, Canadian players to bet, while Betfair does not restrict players from Asia, such as Thailand, South Korea.

How to register an Internet entertainment company with the tax office

The provision of services to UK players by an office without registration, even inadvertently, could be considered tax evasion. Given the weight of the UK in the international community, the consequences could be too severe for the offender. It is, therefore, best to register with HMRC before entering the UK market.

An application must be made to the regulatory authority in advance. For most countries, the commencement of the license starts at least 31 days after the application for registration. The waiting period is shortened to 14 days for representations from the UK itself, the Isle of Man and Gibraltar, European Union countries as well as Norway, Iceland, the Faroe Islands, South Africa, and New Zealand.

Registration is online and not otherwise – there is no provision for paper filing. This makes sense for offices that do not have physical offices and provide services online.