VAT and gambling

Are you a TORY or LIB supporter spreading RUMOURS like that ? ]:)

Google shows nothing, so I guess he's winding you up.

Like all malicitious rumours re LABOUR/G BROWN..........can only be a TORY with NO POLICIES!

All Tories talk about is the increase in NIC .....which is NEXT YEAR......a whole freaking year away......but they don't talk about the CUTS they will do as soon as they damn well get in!

WALOFS

Cosmic your friend was correct about the 17.5% on top of the 5%, but betfair have already introduced it, and they call it by another name, premium charge I think ;)

Let's introduce a bit of clarity here. First of all apparently it's something he read in some newspaper or other -- so admittedly very unreliable.

But let's suppose it's true. If someone were hypothetically winning £10,000 a year on here and we had 20% VAT on all winning bets it certainly wouldn't be the case that they would only have winnings of £10,000 - 20% VAT = £8,000 (it's probably reasonable to assume VAT will increase from 17.5% to 20%).

Let's suppose a guy currently winning £10,000 a year from pure gambling pre -event was losing £90 for every £100 he wins pre- commission. Because of commission he wouldn't be winning £100-£90 = £10. He has to pay 5% commission on each £100 he wins. Thus he would only be winning £95 for every £90 he loses. So currently rather than £10 winnings for every £100 he bets he only wins £5 which equals 50% taken off his total profits.

In order to win £10,000 he have to be placing 2000 bets at £100 each bet. (2000*£5 = £10,000)

If an additional 20% was taken off each single win this would mean for every £100 won pre commission he would only be winning £100 - £5 commission - £20 VAT = £75 for every £90 he loses. So instead of winning £5 for every bet he makes he would instead be losing £15!!

Thus if he placed 2000 bets at £100 each time, instead of winning 2000*£5 = £10,000, he would be losing 2000*-£15 = -£30,000.

So he would go from winning £10,000 a year to *losing* £30,000 a year!!

Is my understanding correct here??

Sounds correct. It's also why it won't happen. They scrapped 9% tax (and 10% before that) to stop people moving overseas with their betting.... which is exactly what would happen (more than it already does) if there were a 20% rate introduced.

http://news.bbc.co.uk/sport1/hi/other_sports/1437204.stm

I sincerely hope it won't happen! It seems unlikely to happen once they understand the implications as I've outlined above. Still worried though!

Just did a quick google and found this:

http://www.express.co.uk/posts/view/169932/Bookies-VAT-fear

Cheers.

Thankfully it's the express so meaningless but nice to read it.

I guess the spurs sponsors would just reopen their exchange

Cosmic Horizon 21 Apr 01:06
Let's introduce a bit of clarity here.

snip
Is my understanding correct here??



Although I used to advise on tax I don't have a clue on this one. But surely we cannot be talking about VAT on punters, can we?

What is the status on betting as far as the bookies and exchanges are concerned? Is their income standard, zero or exempt? Standard rated I would guess.

If it is a tax on punters then the situation would become impractical. Or maybe a goldmine for tax consultants. Just register for VAT and reclaim the VAT on all your expenses. Yep build an extension to your house as an office and reclaim the VAT on that.

if there was a tax (massive 99.99999 not going to happen, if) it wouldnt be VAT, it would be betting tax, which is why the express article is**

they use VAT as labour just did pledge not to extend it on certain things recently. So express say they have not ruled it out it out on betting. true they havent ruled it out on fly fishing either. Its total **e.

Its clearly Tory FUD
http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt

Furthermore if your output is the amount won and the input is the amount staked than surely most gamblers in the UK would be well advised to register for VAT to make a VAT reclaim each quarter or month.

It would be a net loss to the Treasury.

straight betting tax would be net loss to treasury, never mind some **ised VAT implimentation

brendanuk1 21 Apr 10:48
straight betting tax would be net loss to treasury, never mind some **ised VAT implimentation



We already have one levied on the bookies. A supplementary Corporation Tax.

i know.

betting tax in the old meaning of betting tax, of one levied on the punters

Countries which tax gamblers, the US, for example, have far more illegal gambling, and therefore problems with organised crime, than Britain. Taxing gambling winnings doesn't prevent gambling anymore than banning it did.

Besides, can you imagine the uproar if some grandma got 20% VAT deducted from her once-in-a-lifetime, £50,000, super national bingo win? It would also be the end of the Lottery.

It just won't happen. But in the unlikely event that it does, I will just relocate.

I actually emailed my friend last night and pasted in the argument that people currently winning £10,000 in a year might well end up losing £30,000 or more. Here is his reply:

Reply



quite interesting I dont know at what point the tax would be levied and it is probably only being generally considered at this point so it is unlikely to come in once they realise the consequences??. But I believe the logic is that the abolition of betting tax by Labour in 2001 creating a growth in gambling (which is seen as a social evil by many on the left who want to control the behaviour of the proles). Here it an extract I found from a 2005 newspaper



Brown it appears would justify his tax on the basis that it is helping to reduce this gambling boom..





Betting is likely to treble in the decade, creating a financial bonanza for bookmakers, an academic study shows. University researchers say Labour's abolition of betting tax four years ago has provided the perfect conditions for a gambling boom.



here is the bit from the paper I read Daily Express on line this week



[i]The Prime Minister has not decided whether to introduce the tax on £11billion of bets every year a move that could be justified on the grounds that betting is a

I actually emailed my friend last night and pasted in the argument that people currently winning £10,000 in a year might well end up losing £30,000 or more. Here is his reply:


quite interesting I dont know at what point the tax would be levied and it is probably only being generally considered at this point so it is unlikely to come in once they realise the consequences??. But I believe the logic is that the abolition of betting tax by Labour in 2001 creating a growth in gambling (which is seen as a social evil by many on the left who want to control the behaviour of the proles). Here it an extract I found from a 2005 newspaper



Brown it appears would justify his tax on the basis that it is helping to reduce this gambling boom..





Betting is likely to treble in the decade, creating a financial bonanza for bookmakers, an academic study shows. University researchers say Labour's abolition of betting tax four years ago has provided the perfect conditions for a gambling boom.



here is the bit from the paper I read Daily Express on line this week



[i]The Prime Minister has not decided whether to introduce the tax on £11billion of bets every year a move that could be justified on the grounds that betting is a

I actually emailed my friend last night and pasted in the argument that people currently winning £10,000 in a year might well end up losing £30,000 or more. Here is his reply:

{quote from friend}
quite interesting I dont know at what point the tax would be levied and it is probably only being generally considered at this point so it is unlikely to come in once they realise the consequences??. But I believe the logic is that the abolition of betting tax by Labour in 2001 creating a growth in gambling (which is seen as a social evil by many on the left who want to control the behaviour of the proles). Here it an extract I found from a 2005 newspaper



Brown it appears would justify his tax on the basis that it is helping to reduce this gambling boom.





Betting is likely to treble in the decade, creating a financial bonanza for bookmakers, an academic study shows. University researchers say Labour's abolition of betting tax four years ago has provided the perfect conditions for a gambling boom.



here is the bit from the paper I read Daily Express on line this week



[i]The Prime Minister has not decided whether to introduce the tax on £11billion of bets every year a move that could be justified on the grounds that betting is a

Oops, didn't think it had posted. It said the message contained invalid data!

" And if it brings in the Gov £1 billion a year whilst also reducing a social ill..."

...while curing cancer, distributing Xmas gifts to orphan kids and putting an end to famine in Africa, it would be the best tax ever!

FWIW from experiences with online poker when paypal pulled out , then when the US government who pulled out, it's the "clever friends" who find the ways to carry on, while the total mugs just give up.

Lori, the effect on the customer can even be overlooked as it is not at all straight forward that the economic effect would be positive.

If it's Brown making the decision, the likelihood of him accurately assessing the economic effect is very slim given his track record.

(Before that explodes into a politics comment, I imagine the other candidates are equally hopeless, just that they havent proved it yet)

Lori 21 Apr 12:14
(Before that explodes into a politics comment, I imagine the other candidates are equally hopeless, just that they havent proved it yet)




More so, I would imagine.

this is already a politics thread. Its clealy Tory FUD and if it needs to be reminded Labour were the ones to get rid of the betting tax in the first place. With Brown as Chancellor

Talk of proles, 1 billion raised and such like is pure shiote. Just calling how i see it

Alex the old wrinkled retainer - If you used to advise on tax.......some of your suggestions above are open to being interpreted as advocating fraudulent transations !

If you are a gambler....you are not "in business" so you can't register for VAT.

Building an extension to office....would need to be connected to "business" use only, and how does gambling enable VAT to become reclaimable.........appears you are suggesting just claim them in similar way certain MPs have with their expenses claims......

transactions ........

brendanuk1 21 Apr 13:47
this is already a politics thread. Its clealy Tory FUD and if it needs to be reminded Labour were the ones to get rid of the betting tax in the first place. With Brown as Chancellor



They didn't. It was largely fiscal neutral and all they did was take it away from the eyes of the punters and taxed the bookies. So now you see it in the overround, or then again you don't but it is still there.

If you are a gambler....you are not "in business" so you can't register for VAT.



Under current legislation I agree. But if gambling outputs are to be taxed then surely it will be impossible not to be able register. Under EU Section something or other. (The EU legislation will come back to me if I think about it really hard.)

VAT =Value Added Tax.
There is no product or service with a bet so VAT cannot apply.

Starting a thread from a rumour then backing it up with tabloid newspaper speculation is quite worrying that there are people that credulous around.

Was it not New Labour that wanted Casinos throughout UK and to make UK the hub of legalised gambling? They seemed very pro-gambling to me.

"Personal end-consumers of products and services cannot recover VAT on purchases, but businesses are able to recover VAT (input tax) on the products and services that they buy in order to produce further goods or services that will be sold to yet another business in the supply chain or directly to a final consumer. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state."

cornubia 21 Apr 18:18
VAT =Value Added Tax.
There is no product or service with a bet so VAT cannot apply.


What a load of b0ll0cks.


I did not need to get past the first sentence to say that and ask what tax qualifications you might have.

cornubia supply is the word you are looking for.


I hope that helps

Here is the way they do it currently. Its called betting duty. Not on profits but on commision etc. When introduced it was meant to gain more revenue than the betting tax after the first few years as the industry grew.

So 9 years later, reverting to betting tax would hit the industry hard. VAT and 17.5% is pure fantasy

There is a similar bingo duty and lottery duty.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&propertyType=document&id=HMCE_CL_000255#P406_40577

9.1 What is the duty charged on?

General betting duty is due on any amount that a betting exchange charges to other parties who use its facilities to make bets, for example:

* commission charges
* administration fees
* deductions from winnings, etc

Betting exchanges are liable to general betting duty at 15%, on the charges they make in each accounting period in relation to bets that are determined in that period.

So betfair pay 15% on our 5%? (And prem charges?)