Do new UK Gaming Licences mean VAT changes for UK affiliates?

[bingostarr]

I was just wondering if the new UK Gaming Legislation means that UK affiliates are now more likely to have to pay VAT? I assume earnings are considered to be in the UK and not from outside now.

Anyone have any insight?

[justbookies]

The two things are not connected. If you are a UK resident then it is your turnovers that decide this. A company that is based in Gibraltar for instance is still based in Gibraltar and so VAT is still outside scope. The VAT rules haven't changed.

[bingostarr]

How I understood it was that if I am providing services to non EU companies, those earnings are exempt from VAT. Earnings from services provided to EU domiciled companies are subject to VAT. Is that incorrect?

[justbookies]

How I understood it was that if I am providing services to non EU companies, those earnings are exempt from VAT. Earnings from services provided to EU domiciled companies are subject to VAT. Is that incorrect?

It is on a case by case basis and also depending if you are on the flat rate VAT system or the normal VAT system. I am on normal system (and so I dont have much knowledge of the flat rate system) and most companies I promote are actually 'outside scope'. But in some instances some products come under "reverse charge". This is similar to 'outside scope' because it does not give rise to a VAT charge, but different in that it does need to be declared on the VAT form (albeit both sides of the form so it cancels itself out).

For instance Paddy Power casino & Bingo seems to be based in Ireland rather than offshore and is 'reverse charge', while the rest of their products are outside scope.

Cashcade and Sky (hestview ltd) do add VAT, so on those invoices VAT applies and then I pay that VAT on to HMRC.
Some of Totesport products (sportsbook and games) attract VAT while the rest doesnt.

For me, almost all other companies I promote are 'outside scope' because they are based in Gibraltar or some other location that is not opted into the eu VAT system. But you cant make assumptions, for instance Malta is part of the eu VAT system even though it is a low tax offshore location.

Sorry if I have made that sound more complicated than it is. But there are no hard and fast rules, each company's circumstance needs to be considered. The only hassle with VAT is doing the paperwork every three months, it doesn't leave you out of pocket. You reclaim what you pay out and you pass on what gets paid to you.

I know many affiliates are on the flat rate scheme and that it can have financial and paperwork benefits over the normal system. Speak to an accountant about that.

[bingostarr]

Thanks for the very detailed response. It makes a lot of sense!