Customs & Excise today launched a consultation process aimed at warding off the threat caused by the growing popularity of 'tax-free' internet and offshore bookmaking.
General betting duty applies to bets placed with a bookmaker in the UK other than at a racecourse. Bookies generally make a total deduction of nine per cent on bets to cover the duty – their 1.25% contribution to the Horserace Levy and administrative costs.
Customs will consult on reforming general betting duty to enable the gambling and racing industries to flourish in the internet age.
There is good news for seaside towns, as the chancellor announced he is abolishing duty on certain types of slot machines traditionally found in seaside arcades. Duty on the type of jackpot machines found in social clubs will also be cut.
The consultation exercise will run until 30 June 2000. The government intends to take a decision on the way forward in time for the chancellor’s autumn Pre-Budget Report, and hopes to make any necessary legal changes in next year’s Budget.
The consultation follows a move in May 1999 by Victor Chandler International which operates from a base in Gibraltar, started offering ‘tax free’ telephone bets to UK customers, levying a deduction of three per cent
The three largest UK bookmakers have, over the last year, also moved some of their operations offshore, and some smaller offshore operators have also started targeting the UK market. Typically, these bookmakers offer nil deductions over the internet and three per cent over the telephone.