Printer Friendly

Betting tax abolished: Spread firms looking for clarification over details of gross profits tax.

Byline: DAVID ASHFORTH

THE Sports Spread Betting Association is to seek further meetings with Customs and Excise officials to clarify the details of the new gross profits tax due to be introduced in January.

Spread-betting companies are less enthusiastic about the replacement of betting duty by a tax on gross profits than their fixed-odds counterparts.

Under the current tax regime, spread-betting firms pay betting duty on the customer's unit stake which, in spread bets, is relatively small in relation to the potential

returns.

From January 1 2002, the spread firms will be obliged to pay a GPT

of ten per cent in respect of sports bets, and three per cent for financial bets. This compares with the rate of 15 per cent applicable to fixed-odds bets.

Ed Nicholson, spokesman for City Index, said yesterday: "The change will mean that, while fixed-odds firms pay 50 per cent less tax, we pay 50 per cent more tax.

"We are disappointed about that and will be having further talks with Customs and Excise to clarify what is a complex area.

"Spread betting is very different from fixed-odds betting."

Paul Austin, spokesman both for the IG Group and for the Sports Spread Betting Association,

expressed similar views.

He said: "The change will increase the amount of tax paid by the IG Group.

"We have calculated that, if the new arrangements had been in force in 2000, IG would have paid between pounds 1.55 million and pounds 1.7 million in tax instead of the pounds 625,000 we actually paid in betting duty.

"We are disappointed that, while the amount of tax paid by fixed-odds bookmakers is likely to drop by 50

per cent or more, the amount

paid by IG will increase by about 150 per cent."

Austin added: "We are seeking

further meetings with Customs and Excise and will be making representations to the Chancellor of the

Exchequer.

"The different rates of GPT applied to spread bets reflects the very different nature of spread betting and the regulations governing it but, ideally, we would have liked a different tax regime."

Both Austin and Nicholson stated that no consideration had been

given to adjusting spreads in order to accommodate the increased tax burden.
COPYRIGHT 2001 MGN LTD
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Sports
Publication:The Racing Post (London, England)
Date:Mar 9, 2001
Words:371
Previous Article:Betting tax abolished: Brown not as hot on history as economics.
Next Article:Betting tax abolished: Government taking pounds 260m gamble with new reforms; Treasury not expecting to reap benefits of radical move until 2005.


Related Articles
RACING: TAX CONCESSION A HOLLOW VICTORY INSISTS BOOKIE.
Spreadwise: Chancellor's spread poser.
IG Index voted `new' company of the year.
The Things They Said.
IG boss's Tory gift sparks row; Wheeler denies link between pounds 5m donation and tax proposals.
Irish breeders hit by loss of tax-free status for stallions; Off-course punters should be able to avoid deductions.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |