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Finance Bill
Schedule 25 — Remote gambling: double taxation relief

569

 

      (3)  

A “reconciliation period” is—

(a)   

if P has monthly accounting periods, a period consisting of

12 consecutive accounting periods,

(b)   

if P has quarterly accounting periods, a period consisting

of 4 consecutive accounting periods, and

5

(c)   

if P has any other length of accounting period, a period

consisting of such number of consecutive accounting

periods as would produce a period as near as possible to

365 days.

      (4)  

In relation to an accounting period, a reference to “the

10

reconciliation period” is to the reconciliation period in which that

accounting period falls.

Credit allowed

3     (1)  

To determine whether credit is allowed for an accounting

period—

15

(a)   

calculate the notional UK liability and the notional foreign

liability for the accounting period, and

(b)   

compare the two figures.

      (2)  

No credit is allowed if either figure is nil or both figures are nil.

      (3)  

Subject to that, credit is allowed of an amount equal to the smaller

20

of the two figures (or, if they are the same, of an amount equal to

that figure).

Notional UK liability

4          

The notional UK liability for an accounting period is calculated as

follows—

25

           

           

Step 1

           

If the applicable class is a class to which a provision of sections 2

to 4 applies, calculate P’s net stake receipts for the period in

accordance with section 5 but by reference to eligible bets (rather

30

than bets of the applicable class).

           

           

If the applicable class is the class to which section 5AB applies,

calculate the commission charges in accordance with that section

relating to eligible bets determined in the period (rather than bets

35

to which that section applies).

           

           

If the applicable class is dutiable pool bets, calculate P’s net pool

betting receipts for the period in accordance with section 7A but

by reference to eligible bets (rather than dutiable pool bets).

40

           

           

In calculating P’s net stake receipts or net pool betting receipts for

the purposes of this Step, do not carry forward to the period any

losses in respect of eligible bets that arose in an accounting period

before the start of the reconciliation period.

45

           

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

570

 

           

Step 2

           

If the amount calculated under Step 1 is nil or a negative amount,

the notional UK liability for the period is nil.

           

           

Otherwise, apply the appropriate rate to the amount calculated

5

under Step 1. The result is the notional UK liability for the period.

           

           

“The appropriate rate” is the percentage specified in whichever of

section 2(3), 3(3)(a), 3(3)(b), 4(3), 5AB(4) or 7(2) applies to the

applicable class, as in force for the accounting period in question.

10

           

Notional foreign liability

5          

The notional foreign liability for an accounting period is

calculated as follows—

           

15

           

Step 1

           

Calculate the amount of qualifying foreign tax that would be

payable by P for the accounting period if the tax were charged

solely in respect of eligible bets and accounted for by reference to

periods corresponding to P’s accounting periods.

20

           

           

Any apportionment needed for this calculation is to be done on a

just and reasonable basis.

           

           

If the law under which the qualifying foreign tax is imposed

25

provides for losses to be carried forward, do not carry forward to

the period any losses (in respect of eligible bets) that arose before

the start of the reconciliation period.

           

           

Step 2

30

           

If the amount calculated under Step 1 is nil, the notional foreign

liability for the period is nil.

           

           

Otherwise, calculate the sterling equivalent of the amount

calculated under Step 1. The result is the notional foreign liability

35

for the period.

           

           

The sterling equivalent is to be calculated using the London

closing exchange rate for the last day of the accounting period.

           

40

Clawback

6     (1)  

This paragraph applies if in respect of the applicable class of

bets—

(a)   

P receives a repayment under section 5E or 8ZA for one or

more accounting periods in a reconciliation period, and

45

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

571

 

(b)   

the amount calculated under Step 1 in paragraph 4 for the

final accounting period in that reconciliation period is a

negative amount.

      (2)  

P is liable to repay all or part of the repayment or repayments

received.

5

      (3)  

The amount that P is liable to repay is the smallest of—

(a)   

the loss multiplied by the rate at which the qualifying

foreign tax is charged in respect of eligible bets,

(b)   

the loss multiplied by the appropriate rate (as defined in

paragraph 4) for the applicable class of bets, and

10

(c)   

the repayment (or the sum of the repayments) made to P

for the reconciliation period.

      (4)  

“The loss” means the negative amount mentioned in sub-

paragraph (1)(b) but expressed as a positive number.

      (5)  

If there is more than one rate at which the qualifying foreign tax is

15

charged in respect of eligible bets, each rate is to be applied to an

appropriate portion of the loss in order to arrive at the amount

under sub-paragraph (3)(a).

      (6)  

If all or part of the qualifying foreign tax is calculated other than

on a net receipts basis, sub-paragraph (3) has effect as if paragraph

20

(a) were omitted.

      (7)  

Any amount due from P under this paragraph is to be treated as if

it were an amount of unpaid general betting duty or, as the case

may be, pool betting duty.

Breach of return obligations

25

7          

The Commissioners are not required to make a repayment under

section 5E or 8ZA if P is in breach of any obligation to deliver a

return with respect to—

(a)   

general betting duty,

(b)   

pool betting duty,

30

(c)   

bingo duty,

(d)   

remote gaming duty,

(e)   

gaming duty, or

(f)   

lottery duty.

Reduction etc in foreign tax paid

35

8     (1)  

Sub-paragraphs (2) to (4) apply if any of the following events take

place—

(a)   

the way in which a qualifying foreign tax is charged or

calculated is changed retrospectively,

(b)   

a tax authority waives or refunds all or part of an amount

40

of qualifying foreign tax due from P, or

(c)   

as a result of being liable to pay an amount of qualifying

foreign tax, P or a connected person is entitled to any kind

of tax deduction or relief calculated by reference to the

amount of qualifying foreign tax.

45

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

572

 

      (2)  

P must notify the Commissioners of the event on becoming aware

of it.

      (3)  

If the event is a retrospective change in the way in which the

qualifying foreign tax is charged or calculated, the amount for

which credit is allowed under section 5E or 8ZA is to be

5

recalculated in accordance with this Schedule.

      (4)  

In any other case, the amount for which credit is allowed under

section 5E or 8ZA is to be reduced by a just and reasonable sum to

reflect the amount of tax waived or refunded or the deduction or

relief given.

10

      (5)  

If it transpires (on account of this paragraph or otherwise) that a

repayment or part of a repayment under section 5E or 8ZA should

not have been made, P is liable for the amount that should not

have been repaid, as if it were unpaid general betting duty or, as

the case may be, pool betting duty.

15

      (6)  

Section 1122 of the Corporation Tax Act 2010 (connected persons)

applies for the purposes of sub-paragraph (1)(c).”

8     (1)  

Schedule 1 (betting duties) is amended as follows.

      (2)  

In paragraph 2, after sub-paragraph (4) insert—

    “(5)  

Regulations under this paragraph may also in particular include

20

provision about claims for repayment under section 5E and about

the making of any such repayment, including provision about—

(a)   

the time within which claims may be made,

(b)   

the form, content and delivery of claims,

(c)   

the evidence required to satisfy the Commissioners of the

25

validity of claims, and

(d)   

the investigation and processing of claims.”

      (3)  

In paragraph 2A, after sub-paragraph (3) insert—

    “(4)  

Regulations under sub-paragraph (2) may also include provision

about claims for repayment under section 8ZA and about the

30

making of any such repayment, including provision about

anything mentioned in paragraph 2(5)(a) to (d).”

9          

After Schedule 4A insert—

“Schedule 4B

Remote gaming duty: double taxation relief

35

Introduction

1          

This Schedule sets out the rules for determining whether credit is

allowed under section 26IA for qualifying foreign tax paid by P.

Reconciliation periods

2     (1)  

For the purposes of this Schedule, a “reconciliation period” is—

40

(a)   

if P has quarterly accounting periods, a period consisting

of 4 consecutive accounting periods, and

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

573

 

(b)   

if P has any other length of accounting period, a period

consisting of such number of consecutive accounting

periods as would produce a period as near as possible to

365 days.

      (2)  

In relation to an accounting period, a reference to “the

5

reconciliation period” is to the reconciliation period in which that

accounting period falls.

Credit allowed

3     (1)  

To determine whether credit is allowed for an accounting

period—

10

(a)   

calculate the notional UK liability and the notional foreign

liability for the accounting period, and

(b)   

compare the two figures.

      (2)  

No credit is allowed if either figure is nil or both figures are nil.

      (3)  

Subject to that, credit is allowed of an amount equal to the smaller

15

of the two figures (or, if they are the same, of an amount equal to

that figure).

Notional UK liability

4          

The notional UK liability for an accounting period is calculated as

follows—

20

           

           

Step 1

           

Calculate P’s remote gaming profits for the period in accordance

with section 26C(2) but by reference to the use of the facilities

provided by P for eligible gaming (rather than remote gaming

25

generally).

           

           

In calculating P’s remote gaming profits for the purposes of this

Step, do not carry forward to the period any losses (in respect of

the use of the facilities for eligible gaming) that arose in an

30

accounting period before the start of the reconciliation period.

           

           

Step 2

           

If the amount calculated under Step 1 is nil or a negative amount,

the notional UK liability for the period is nil.

35

           

           

Otherwise, apply the appropriate rate to the amount calculated

under Step 1. The result is the notional UK liability for the period.

           

           

“The appropriate rate” is the percentage specified in section 26C(1)

40

as in force for the accounting period in question.

           

Notional foreign liability

5          

The notional foreign liability for an accounting period is

calculated as follows—

45

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

574

 

           

           

Step 1

           

Calculate the amount of qualifying foreign tax that would be

payable by P for the accounting period if the tax were charged in

respect of eligible gaming and were accounted for by reference to

5

periods corresponding to P’s accounting periods.

           

           

Any apportionment needed for this calculation is to be done on a

just and reasonable basis.

           

10

           

If the law under which the qualifying foreign tax is imposed

provides for losses to be carried forward, do not carry forward to

the period any losses (in respect of eligible gaming) that arose

before the start of the reconciliation period.

           

15

           

Step 2

           

If the amount calculated under Step 1 is nil, the notional foreign

liability for the period is nil.

           

           

Otherwise, calculate the sterling equivalent of the amount

20

calculated under Step 1. The result is the notional foreign liability

for the period.

           

           

The sterling equivalent is to be calculated using the London

closing exchange rate for the last day of the accounting period.

25

           

Clawback

6     (1)  

This paragraph applies if in respect of eligible gaming—

(a)   

P receives a repayment under section 26IA for one or more

accounting periods in a reconciliation period, and

30

(b)   

the amount calculated under Step 1 in paragraph 4 for the

final accounting period in that reconciliation period is a

negative amount.

      (2)  

P is liable to repay all or part of the repayment or repayments

received.

35

      (3)  

The amount that P is liable to repay is the smallest of—

(a)   

the loss multiplied by the rate at which the qualifying

foreign tax is charged in respect of eligible gaming,

(b)   

the loss multiplied by the appropriate rate (as defined in

paragraph 4), and

40

(c)   

the repayment (or the sum of the repayments) made to P

for the reconciliation period.

      (4)  

“The loss” means the negative amount mentioned in sub-

paragraph (1)(b) but expressed as a positive number.

      (5)  

If there is more than one rate at which the qualifying foreign tax is

45

charged in respect of eligible gaming, each rate is to be applied to

 
 

Finance Bill
Schedule 25 — Remote gambling: double taxation relief

575

 

an appropriate portion of the loss in order to arrive at the amount

under sub-paragraph (3)(a).

      (6)  

If all or part of the qualifying foreign tax is calculated other than

on a net receipts basis, sub-paragraph (3) has effect as if paragraph

(a) were omitted.

5

      (7)  

Any amount due from P under this paragraph is to be treated as if

it were an amount of unpaid remote gaming duty.

Breach of return obligations

7          

The Commissioners are not required to make a repayment under

section 26IA if P is in breach of any obligation to deliver a return

10

with respect to—

(a)   

general betting duty,

(b)   

pool betting duty,

(c)   

bingo duty,

(d)   

remote gaming duty,

15

(e)   

gaming duty, or

(f)   

lottery duty.

Reduction etc in foreign tax paid

8     (1)  

Sub-paragraphs (2) to (4) apply if any of the following events take

place—

20

(a)   

the way in which a qualifying foreign tax is charged or

calculated is changed retrospectively,

(b)   

a tax authority waives or refunds all or part of an amount

of qualifying foreign tax due from P, or

(c)   

as a result of being liable to pay an amount of qualifying

25

foreign tax, P or a connected person is entitled to any kind

of tax deduction or relief calculated by reference to the

amount of qualifying foreign tax.

      (2)  

P must notify the Commissioners of the event on becoming aware

of it.

30

      (3)  

If the event is a retrospective change in the way in which the

qualifying foreign tax is charged or calculated, the amount for

which credit is allowed under section 26IA is to be recalculated in

accordance with this Schedule.

      (4)  

In any other case, the amount for which credit is allowed under

35

that section is to be reduced by a just and reasonable sum to reflect

the amount of tax waived or refunded or the deduction or relief

given.

      (5)  

If it transpires (on account of this paragraph or otherwise) that a

repayment or part of a repayment under section 26IA should not

40

have been made, P is liable for the amount that should not have

been repaid, as if it were unpaid remote gaming duty.

      (6)  

Section 1122 of the Corporation Tax Act 2010 (connected persons)

applies for the purposes of sub-paragraph (1)(c).”

 
 

 
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Revised 9 May 2012