Betfair warns Treasury over tax rate changes
Betfair, the betting exchange, has issued a veiled threat to the Government that it will move its operations offshore if it gets slapped with a heavier tax rate than traditional bookmakers.
Betfair's chairman Sir Robert Horton said in the company's annual report, published yesterday, 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.
2005-06-12
