Once again, British bookmakers are waiting for Chancellor Gordon Brown's next budget announcement to learn his directives regarding betting duty. As part of his upcoming budget announcement, Brown is expected to propose changes to the Finance Bill that would crack down on the many companies offering tax-free betting by telephone and the Internet. A report on betting duty by the Commons public account committee warned that as much as £100 million in betting duty revenue could be lost if changes aren't made to its collection method.
One solution, referred to as the "stealth tax," would require British bookmakers to collect a levy on every bet made in the nation. This would replace the current choice given punters, which lets them decide whether to pay their duty on each bet or on the winnings themselves.
"Given the estimated losses of betting duty, there is a risk that the department's (Customs and Excise)
coverage will be insufficient to protect the integrity of gambling duties and miss opportunities to protect and increase revenue levels," reads a quote from the report Accountancy Age ran.
Brown's budget announcement is still a few months off, however, giving British bookmakers some time to argue their side. Debates had raged for months before the last budget announcement regarding whether the government should or would lower the betting duty.
Bookmakers pled in vain, however, with no changes made last year to the betting duty. To maintain their U.K. base, which permits the sites to advertise their Internet betting services there, many bookmakers have launched both on and offshore Internet betting service. (Ladbrokes, for example, offers betting via its U.K. site, ladbrokes.co.uk, as well as its offshore site, ladbrokes.com.) Bookmakers, however, typically eat the tax charged for bets on the U.K. site, while attracting an international array of punters betting tax-free on the offshore site. It's a stopgap measure, obviously, but it seems to be working. . . for now.