Betfair Cautions On U.K. Taxation
Published: Friday, June 24, 2005 Online-Casinos.com
BETFAIR CAUTIONS ON U.K. TAXATION
Move offshore a possibility says chairman
The question of British government taxation on internet betting sites was front
and centre again this week as the chairman of Betfair issued a veiled threat that
it will move its operations offshore if it gets lumbered with a heavier tax rate
than traditional bookmakers.
Writing in the companys annual report, Betfair's chairman Sir Robert Horton said
that he had "pointed out" to the Treasury, which is reviewing how betting
exchanges are taxed, the "...considerable drawbacks of introducing an inequitable
tax structure among UK-based operators".
Betfair wants the Government to maintain the status quo of the same rate of tax
for traditional bookmakers and betting exchanges, which match bets between individuals.
Betfair's high street rivals argue that many of Betfair's customers are acting
as professional bookmakers and should pay the gross profits tax which they pay.
Betfair has recently been granted a licence to operate in Malta, and is prepared
to make a full-scale move there if the Government bows to the high street betting
shops' demands.
It says all its customers should be treated the same, whether they back a horse
to win or "lay" it to lose, as Betfair, which is a licensed bookmaker,
pays its fair share gross profits tax on its customers' winnings. "Our gross
profits tax payment rose to £14.3m from £9.3m last year," Stephen
Hill, the chief executive of Betfair, said yesterday when announcing its full-year
results.
Pre-tax profits for the year rose 74 per cent despite taking a £4m hit to
bail out customers of its rival, Sporting Options, which went bust last year.
Mr Hill declined to comment on whether Betfair is soon to float, but it is understood
to have been lining up bankers to take on the task and a decision on whether to
pursue a listing is expected within the next month.
