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


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


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


"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.
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Title Annotation:Sports
Publication:The Racing Post (London, England)
Date:Mar 9, 2001
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