Racing in potential levy windfall following debate

[hgodden]

Racing in potential levy windfall following debate

From the Racing Post

THE government on Tuesday night opened the door to the levy being extended to offshore operators, a surprise move which could give British racing's finances a multi-million pound boost.

An amendment to the Gambling Bill which will give the culture secretary the power to extend the levy to offshore operators, which they currently avoid paying and is estimated to cost the sport £20 million a year, will be forwarded by government to the third reading of the bill which takes place on March 18 and will have cross-party support.

The news does not mean the online and telephone operations of bookmakers based offshore are certain to have to pay levy as European state aid rules will have to be satisfied.

However, a similar levy in France did pass state aid rules last year and the announcement will be regarded as momentous by the BHA who have been pressing the government on the issue.

The news emerged in the House of Lords on Tuesday night as the Gambling (Licensing & Advertising) Bill, which will regulate gambling on a point of consumption basis, reached its report stage and amendments were debated.

The fifth of those amendments, put forward by Viscount Astor and Lord Collins of Highbury, sought to give the minister reserve power to extend liability to pay the levy to offshore operators.

In reply, government minister Lord Gardiner of Kimble said: "We agree with the view that while we have a statutory levy it should be fairly applied. Furthermore, we are persuaded that including a clause about extending the levy to offshore remote operators is fully in keeping with the context and purpose of the bill.

"We will therefore bring forward a government amendment at the third reading which will remedy your lordships' concern about a level playing field between on and offshore betting operators in terms of the levy.

"This amendment, with the consent of the house, will give the secretary of state power to use secondary legislation to secure levy extension to offshore remote operators."

He added: "Bringing forward a government amendment will complement the work I have mentioned to your lordships that is already under way to seek clarity on the state aid issues from the European Commission."

[andyfuller]

I don't get why we can't introduce the same point of consumption tax on all other industries?

It would stop Starbucks, Google, Amazon etc etc avoiding taxes.

Can anyone explain why it can't be done outside of bookmaking?

[Will Sharpe]

What about VAT?

[Iron]

I don't get why we can't introduce the same point of consumption tax on all other industries?

It would stop Starbucks, Google, Amazon etc etc avoiding taxes.

I pay more than enough tax as it is, thank you very much!

Can anyone explain why it can't be done outside of bookmaking?

Bookmaking is an easy target - politicians can come out with touchy-feely bs about how they are protecting vulnerable people...

Jeff

[hgodden]

I don't get why we can't introduce the same point of consumption tax on all other industries?

It would stop Starbucks, Google, Amazon etc etc avoiding taxes.

Can anyone explain why it can't be done outside of bookmaking?

I take it that's a rhetorical question?

Come on Andy you're a smart guy, everybody knows the mega corporations thanks to their political chums have their own set of rules

[andyfuller]

What about VAT?

VAT applies to the end consumer. A point of consumption tax as is being proposed for betting is a tax on gross profits of the bookmakers.

So in the case of Amazon and a new mouse matt. VAT would be applied to the sale price whereas a POCT would be placed upon the profits made by Amazon as I, as the person purchasing the item is in the UK. At present we pay VAT on the new mouse matt but Amazon don't pay tax (or v.little) on the profit they make by selling me the new mouse matt.

I pay more than enough tax as it is, thank you very much!

It would be the company paying the tax not the consumer (though they could up the prices to cover the tax but due to competition they are more likely to offset a large part of it in reduced profits).

Bookmaking is an easy target - politicians can come out with touchy-feely bs about how they are protecting vulnerable people...

I think Amazon, Google, Starbucks etc are also easy Political targets given the outrage expressed in the country over how little these companies pay in tax.

[andyfuller]

I take it that's a rhetorical question?

Come on Andy you're a smart guy, everybody knows the mega corporations thanks to their political chums have their own set of rules

It is and it isn't. I know how much in each others pockets they are but for the likes of the Lib Dems who have little to loose I would guess by suggesting such a policy they have a lot to gain in terms of numbers of votes. I am surprised non of the fringe parties have talked about it.

I might have to 'Call Clegg' about it on his radio show

[hgodden]

I didn't know he had a radio show, I know what I'd like to ring him up and call him

Let us know where we can hear it if you do

[superfrank]

the powerful Mr Clegg fresh from his triumph of charging 5p for plastic bags in supermarkets.

i was in a pub last year and Clegg was in there - i got up to go for a waz and his security goons stopped and frisked me. the most embarrassing bit was being in the same boozer as him.

[Iron]

It would be the company paying the tax not the consumer (though they could up the prices to cover the tax but due to competition they are more likely to offset a large part of it in reduced profits).

I think it's more likely that they will pass the cost onto the public than saying 'We will have to take this one on the chin chaps'.

Also, the interests of big business and the interests of ordinary people aren't separate things as long as ordinary people buy shares and work for big companies.

Plus, do we really want to do the equivalent of hanging a banner over the cliffs of Dover saying 'Multi-national business investment not welcome'?

No, low tax and proper austerity is the way forward for this country!

Jeff

[Iron]

http://www.lbc.co.uk/call-clegg-nick-cl ... -lbc-65903

I didn't know he had a radio show, I know what I'd like to ring him up and call him

Let us know where we can hear it if you do

[andyfuller]

I think it's more likely that they will pass the cost onto the public than saying 'We will have to take this one on the chin chaps'.

I don't think they would pass it on fully, if they did they would become uncompetitive. Also it would have benefits such as making our home grown businesses more competitive in our market. The likes of your local coffee shop would stand much more of a chance if Starbucks had to pay 'their fair share of tax'. Which would mean more tax and more profits stay in the UK which leads on to...

Also, the interests of big business and the interests of ordinary people aren't separate things as long as ordinary people buy shares and work for big companies.

Plus, do we really want to do the equivalent of hanging a banner over the cliffs of Dover saying 'Multi-national business investment not welcome'?

I don't see it as an either or, I still think Starbucks would have a UK presence for example, but we may see a more diverse range of businesses rather than just a few extremely large businesses which would lead to greater competition.

No, low tax and proper austerity is the way forward for this country!

It isn't a matter of increasing tax rates, it is a matter of keeping them at the same rate but changing the way in which they are collected meaning those that can afford to spend vast amounts of money on avoidance schemes are no longer able to take advantage of moving profits offshore.

[andyfuller]

To give Clegg some credit he at least takes questions direct from the public on the radio show, unlike all other leading politicians and clearly doesn't get a pre warning on the topics and the calls aren't filtered. Some of them love a good rant at him

Anyway seems the only reason put forward so far for not having a POC Tax in other areas is that they don't want to risk upsetting their mates.

[Iron]

The likes of your local coffee shop would stand much more of a chance if Starbucks had to pay 'their fair share of tax'. Which would mean more tax and more profits stay in the UK which leads on to...

So the legislation would only apply so bigger companies?

I thought you didn't believe in discrimination.

All you're doing there is interfering with the free market and picking winners.

I don't see it as an either or, I still think Starbucks would have a UK presence for example, but we may see a more diverse range of businesses rather than just a few extremely large businesses which would lead to greater competition.

By 'greater competition', I take it you mean 'more smaller business without cost-reducing economies of scale'?

Again, you're advocating picking winners rather than letting the free market decide who wins and who loses.

It isn't a matter of increasing tax rates

So you say.

Do you really think George Osborne will introduce a new tax whose effect will be revenue neutral, and spurning an opportunity to increase overall tax revenues?

it is a matter of keeping them at the same rate but changing the way in which they are collected meaning those that can afford to spend vast amounts of money on avoidance schemes are no longer able to take advantage of moving profits offshore.

What's wrong with companies moving their money offshore?

It's their money to do with what they wish. They earned it. They have no moral obligation to fund Britain's rampant public sector spending.

The solution to Britain's deficit is to spend less, not to introduce socialist measures to claw money from the rich...

Jeff

[andyfuller]

Not sure where you get the idea that it will only apply to bigger companies from. If you look at the bookmakers it applies to Betfair just the same as it applies to my local independent bookmaker.

The point of consumption tax on bookmakers will not differentiate on anyone, it will apply to all bookmakers' profits made on punters based in the UK. It is just a different way of collecting the same tax than is currently used.

As such you are not interfering with the free market and picking winners. You are saying that if you want to take a bet from a UK based punter you must pay tax on any profits you as a company make from taking that bet from the UK punter. I.e. you want to use our resources (our punters), you have to pay us to do that. This should lead to a higher revenue take from the bookmaking industry and a reduced revenue take for say Gibraltar. Added to this fact that it is also looking likely that these companies will be returning some of their operations back to the UK from abroad which will lead to increased employment in the UK gambling industry but a reduced level of employment in Gibraltar.

Finally, yes the companies have earned the money but why should they not pay tax on the profits in the country in which they earned it? They have taken advantage of that country in order to earn those profits.

The argument is not to do with the excess of the public sector spending. That is a different topic. It is about getting in this case the bookmakers to pay what the government deem a fair share for operating in the UK in this case 15%.

My final point, if the bookmakers were all able to operate abroad there would be no tax revenue take from their profits. Is that what you consider the best option? What is your true idea of a free and fair market for the bookmakers Jeff? No tax?

Right back to work for me and earning profits from those lovely Amazon and Starbucks shares