HMRC, the UK tax authority, announced on October 28, 2026 plans to change the tax on remote gaming: from April 1, 2027, free plays (freeplays) will be classed as restricted plays. The measure is part of the Finance Bill 2026–2027 and will fully replace section 159A of the Finance Act 2014. This follows from the HMRC document and an accompanying note on the measure's impact.
The note explains the change by saying that the tax treatment of free spins, prizes and tournaments has given rise to "different interpretations". The rules in this area were introduced by the Finance Act 2017.
The basic logic stays the same. If a player can only win a free play and uses it, no tax is due. A won restricted play spent on another restricted play is not taxed either. The exception: the operator gives money, account credit or another benefit in return. Then the won freeplay falls into the tax base.
A new definition of "prize" is also introduced. Tax is charged on the profit from remote games: the money paid by players minus the amounts paid out as prizes under the published game rules. Voluntary payments are not counted as prizes and are not deducted from the base. Separate rules will cover an entry fee that is returned after a game is interrupted or ended.
The remote gaming duty rate is currently 40%: it was raised from 21% by the 2025 Budget, effective April 1, 2026. That is why disputed wording about bonuses and prizes now affects a much larger sum than when it was written.
The government does not expect budget effects until 2031–2032. The note describes the measure as an anticipatory step to ensure compliance with tax law, which supports existing policy. Administrative costs are estimated as minor, but operators may face one-off costs for familiarising themselves with the definition.
