George Osborne’s draft finance bill, due to be published tomorrow, will set a tax on offshore gambling operations, bringing them in line with levies on companies that base themselves here.
However, Osborne is also considering a cut to taxes on online bookies that are based in the UK.
The chancellor hopes that making the domestic tax system friendlier will reverse an exodus of companies that moved their bases to the likes of Malta and Gibraltar after Labour introduced a 15 per cent tax rate in 2005.
Bringing that down to 10 per cent is expected to make the UK a more attractive place to do business, especially in tandem with the new measures designed to make operating abroad less appealing.
The “point of consumption” proposal, which will be laid out in detail tomorrow, will tax companies based on where bets were placed, rather than where the company trades.
The plans follow a lengthy consultation with the industry. Treasury sources said creating a “level playing field” could add hundreds of millions of pounds to the government’s coffers.
The likes of Betfair, William Hill and Ladbrokes have moved parts of their businesses to Gibraltar, where there is a far smaller tax on online gambling.