Bookies 'avoid more tax than Amazon or Starbucks'

Feb 1, 2013

UK high street names escape paying up to £1bn in tax by offshore schemes, claims investigation

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BRITISH bookmakers have sidestepped paying up to £1 billion in UK tax since 2009, dwarfing controversial tax avoidance deals such as those operated by Amazon and Starbucks, reports The Independent.

By routing online and telephone gambling through overseas tax havens in Gibraltar, the Isle of Man and Guernsey, bookies and casinos can avoid UK gambling duty of 15 per cent. Instead, they pay less than one per cent.

The offshore tactic is used by leading high street firms including William Hill and Ladbrokes, The Independent claims. With £250m annual savings, they avoid more tax than Starbucks and Amazon, but disclosure of the scale of the operation is likely to provoke similar fury. However, the government does not intend to close the betting loophole until December 2014, according to the paper.

Labour treasury spokesperson Catherine McKinnell told The Independent: "The government should be straining every sinew to clamp down on aggressive tax avoidance, and loopholes as quickly as possible." Richard Murphy, of the Tax Justice network, said: "This indicates, yet again, the toothless approach of the UK's tax authorities to tax avoidance."

The claims come after the government was told to legislate instead of haranguing businesses about morality by one of Britain’s top accountants. Ernst & Young's Mark Otty, managing partner for Europe, Middle East and Africa, said companies had an "obligation" to their investors to pay the lowest tax possible. "The simplest solution is to stop banging on about morality and change the law," he said. "The only way you can resolve this issue is through a legal code."

William Hill denied it was "engaged in any avoidance scheme or artificial tax structure". Ladbrokes said it was trying to "survive and compete".

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