New Gambling Tax Legislation Signals Return To The UK For ‘Offshore’ Data Centres

UK London u.k.Source Wire – London 25 September 2013 The UK Government is introducing a new law which will remove the tax advantage from betting, gaming and online bingo companies operating their data centres offshore in so-called ‘tax havens’.
“The effects will be more far reaching than these companies realise,” said Stephen Norris, former MP and chairman of Virtus Data Centres, ” From 1st December 2014 not only will UK betting and gaming operators lose their £300 million/year tax advantage, they will soon realise that they are paying way over the odds for electricity, Internet bandwidth, other services and staff airfares for the running of their data centres.”

Norris, who is also president of the Data Centre Alliance, continued to explain that with these extra costs – and the inconvenience of having their data centres in far away in places like Gibraltar, Isle-of-Man and the British Virgin Isles – gaming companies will quickly feel the pinch. “These excessive costs will seriously bite into their bottom-line once the tax advantage disappears.
”We forecast that they will soon wish they were enjoying the much cheaper energy and bandwidth costs (plus the convenience of being close to home) of having their data centre located in a state-of-the-art facility like Virtus’ London data centres,” he said.

The change to tax law is being introduced because the UK government has identified that it is losing some £300 million in tax revenues from UK gaming companies, many of which have relocated their data centres to a low tax economy.

Under the current law the sales transaction is deemed to take place in the data centre, hence the current tax advantage from having the data centre located in a low tax economy.

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