HMRC Triumphs in Free Spins Tax Dispute, Raising Pressure on UK Operators
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Article Date: 2025-09-22T20:25:30+00:00
Article URL: https://www.gamblingnews.com/news/hmrc-triumps-in-free-spins-tax-dispute-raising-pressure-on-uk-operators/
Article Image: https://www.gamblingnews.com/wp-content/uploads/2025/09/uk-flags-news.jpg
Summary
HM Revenue and Customs (HMRC) won a First-tier Tribunal ruling confirming that free spins awarded as prizes count as gaming payments subject to remote gaming duty (RGD). The dispute involved Jumpman Gaming Ltd and assessments totalling more than £13 million. The tribunal interpreted sections 159 and 159A of the Finance Act 2014 to find that while the initial promotional spin did not attract duty, subsequent free spins did.
The ruling rejected Jumpman’s procedural objections and is likely to prompt sector-wide compliance reviews, with operators revisiting promotion structures and potential retrospective tax exposure.
Key Points
- The tribunal upheld HMRC’s view that free spins used by players are taxable as gaming payments under RGD.
- Jumpman Gaming faced assessments exceeding £13 million; judges found some spins taxable even if the first promotional spin was not.
- The decision relies on Finance Act 2014 sections 159 and 159A; Jumpman’s procedural challenge was dismissed.
- UK operators may need to redesign or scale back free-spin promotions to reduce tax exposure.
- Expect increased compliance checks and more conservative promotional spending across the sector.
- The ruling builds on earlier case law (eg Broadway Gaming 2022) and clarifies how freeplay affects RGD calculations.
Content Summary
The article outlines the Jumpman Gaming case: HMRC argued free spins awarded as prizes are taxable and the tribunal agreed. Although Jumpman conceded the first spin could be taxable, it contested tax on the follow-up free spins and claimed HMRC breached time limits on one assessment. The tribunal found HMRC’s amended assessment lawful and concluded that free spins constitute gaming payments for RGD purposes.
Analysts say the ruling will force operators to reassess accounting, marketing and legal approaches to promotions to avoid similar disputes and potential large retrospective liabilities.
Context and Relevance
This matters for compliance teams, finance leads and marketing managers at UK-facing iGaming businesses. The decision signals HMRC’s intent to tighten enforcement and clarifies how the Finance Act 2014 is applied to promotional mechanics. That could change how operators structure bonuses, influence margins and trigger internal audits or renegotiation of promo strategies.
Why should I read this?
Short version: if you touch UK online gambling promos, this could bite your P&L. Free spins might not be just marketing fluff anymore – they’re taxable events. Read it now so you’re not the one scrambling when HMRC asks for back tax.