Finance Bill

My hon. Friend is characteristically right. All gaming—in this case, through casinos—is required to be registered. What we have and what he refers to is a provision within the tax legislation to cover a particular eventuality. Mercifully, because we are a well regulated and well run country in that respect, we do not have to invoke the provision. The provision allows us to charge tax on the operation of what would be unregistered and therefore illegal operations, but operations that, nevertheless, may turn a profit. We would not wish them to avoid being liable for tax on that. Clause 8 and schedule 1 impose a new duty of excise to be known as remote gaming duty, which would apply to remote gaming providers who locate in Great Britain. It might help the Committee if I explain some of the background to the measure. Remote gaming providers provide the opportunity to participate in games of chance for a prize by means of remote communication, such as the internet, television or mobile phones. As Members will be aware, it is presently illegal for a remote gaming operator to locate in the United Kingdom. Remote gaming is therefore outside the scope of the UK’s gambling tax regime. However, the Gambling Act 2005, which was ably steered through the House by my right hon. Friend the Member for Sheffield, Central (Mr. Caborn)—who I am glad to see is sitting on the Front Bench at the moment—will, for the first time, make it legal for a remote gaming operator to locate in Great Britain and to be regulated under the UK jurisdiction. We announced in the 2005 pre-Budget report that, following the provision made in the Gambling Act for remote gaming licences to be offered in this country, remote gaming would be brought within the scope of gambling taxation. We intend to use clause 8 to do that. It will apply from 1 September this year—the same date as the relevant part of the Gambling Act comes into force. Schedule 1 goes on to set the rate of remote gaming duty at 15 per cent. That rate of duty is liable on net receipts—in other words, payments received minus winnings paid out from the remote gaming activity. That is consistent with the taxation of remote betting, which is subject to general betting duty at 15 per cent. Remote gaming duty will be charged on the provision of facilities for remote gaming if the facilities are provided in relation to a remote operating licence issued by the Gambling Commission. That ensures that it is not possible to gain the legitimacy and the benefits of UK regulation without being subject to gambling taxation of any sort. If a provider of remote gaming locates in Great Britain and does not apply to hold a remote gaming licence, the provision of facilities for remote gaming by that operator will also be liable to remote gaming duty. That is a parallel provision to the one that my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) pointed out in relation to clause 7. Businesses that choose to relocate to Great Britain will have to register and then account for remote gaming duty on their net receipts from remote gaming. As set out in the regulatory impact assessment, the regulatory costs are modest. Her Majesty’s Revenue and Customs estimates that the cost of completing a registration form will vary from £7.93 to £15.75, depending on the size of the firm. We estimate the annual cost of completing remote gaming duty returns to be about £130 for all sizes of firm. I hope that those remarks have been helpful to the Committee. I commend the clause and the schedule to the Committee.