TaxPersonal TaxCustoms hit with £50m tax shock ahead of Grand National

Customs hit with £50m tax shock ahead of Grand National

Customs & Excise is facing the loss of up to £50m in betting taxes over the next year due to offshore gambling, despite government claims that its growth is having no impact on tax yields.

A National Audit Office report, issued just a week before the Grand National, estimates that lost revenue fromtelephone betting would amount to £50 million in 2000-2001 if all telephonebetting was to move offshore.

However, the report downplays the dangers to the taxman presented by internet gambling.The Treasury claimed earlier this month that the migration of bookmakers had hadlittle impact on the general betting duty yield. Customs collected £462 millionin betting revenue in 1997/98, which increased to £480 million in 1998/99,according to the budget report.

But three major bookmaking chains have already set up operations in Gibraltar, slashingtheir betting charges from 9% in the UK to 3% or less.

Simon Powell, FD at British Horseracing Board said: ‘If you’re a punter, you arenot going to bet in the UK when 9% is deducted in general betting duty. Some ofthe bigger bookmakers now working offshore have cut the duty to between 3% and0%.’

In a bid to counter the loss of revenue, Customs is considering whether itsCollections Department has organised their ‘staff resources in the mostefficient way to carry out audit work on betting and gaming traders.’

The report revealed discussions have been launched within the Organisation ofEconomic Cooperation and Development (OECD) in a bid to prevent widespreadevasion and avoidance.

Powell fears the exodus of the larger bookmakers could threaten the entirehorse racing industry and urges the government to rethink its policy on generalbetting duty.The racing industry depends on bookmakers for funding.

Government acts to stem flow of bookmakers offshore with betting tax move

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