Legality of PoC tax to face EU ruling
Lord Justice Charles questions legality of UK tax and rules case should be heard by Court of Justice of the European Union
The Gibraltar Betting and Gaming Association’s (GBGA) attempt to overturn the UK Point of Consumption tax received a major boost this morning after the UK courts ruled the levy could be in breach European law and will be referred to the Court of Justice of the European Union.
In a judgment passed down this morning, Mr Justice Charles agreed with the GBGA’s claim that the implementation of the tax, which has been in force since 1 December, raised several important issues concerning Article 56 of the Treaty on the Functioning of the European Union.
Mr Justice Charles questioned whether the tax had resulted in a restriction on the free movement of trade between Gibraltar and the UK and also whether the UK could be justified in implementing a tax to address a perceived competitive advantage for overseas operators.
The next stage will be a formal reference by the High Court to the Court of Justice of the European Union where if the tax regime is found to be in breach of European law, HMRC could be ordered to repay all of the tax it has taken to-date.
GBGA chief executive Peter Howitt described the judgment as a “sensible decision” and said it was right that the UK shouldn’t be allowed to rule on the legitimacy of its own legislation.
“This is an important decision for all industries and it is quite correct that it should be determined by the European Court rather than within the country that has created this unfair position,” Howitt said.
“We maintain that the tax regime introduced by Her Majesty’s Government skews the market in favour of domestic providers to the detriment of law abiding operators like our members, in clear breach of European law.
“Because of this sensible decision we now look forward to European judges considering this matter and believe they will confirm our position,” he added.
However, a spokeperson for the HMRC said it remained confident the tax would be found to be lawful.
“The judgment has not found against any aspects of the UK gambling tax regime, and we remain confident that the place of consumption reform for the gambling tax regime is lawful,” the spokeperson said.
The judgment follows a hearing of the case in March after the GBGA in October issued judicial review proceedings asking the High Court to determine the lawfulness of the new tax regime.