why is betting VAT exempt

ninky_2

can anyone explain the logic of this to me?

and if we need to increase tax revenues wouldn't this be a good place to start?

jd87

Gambling companies profits are already taxed (at 15% I believe) on top of other general business taxes. If you place even more tax demands on these companies they will just take their business abroad.

StevieJ

jd87 wrote: »

Gambling companies profits are already taxed (at 15% I believe) on top of other general business taxes. If you place even more tax demands on these companies they will just take their business abroad.

So will the punters, internet you know :eek:

Really2

Did they not take it off recently? (last 10 years) I presume like steve said internet.

ninky_2

but couldn't internet argument be given for other things that are not VAT exempt. couldn't there be some mechanism by which if you are gambling from the UK on the internet the VAT is added?

Really2

ninky wrote: »

but couldn't internet argument be given for other things that are not VAT exempt.

Such as? No goods are sent via gambling so what other things are you thinking of?

1984ReturnsForReal_2

I don't think you purchase anything physical when you place a bet...


Perhaps that is why no VAT is paid.

kennyboy66_2

Gambling has always been VAT exempt. To be anything else would be absurd.
Do you also think share investments should have VAT applied ?
The clue is in the title of the tax (Value Added).

There is no supply of goods or services, so therefore cannot be any VAT applied.

There used to be betting duty (roughly 6% although bookmakers rounded it upto 10%) but this was replaced by a tax on bookmakers profits.

One area ripe for an increase in tax would be the FOBT (basically roulette, card games etc) machines in bookmakers. I believe the profit from each machine is roughly £28k per year per machine.

While almost all gambling doesn't really have much of a social benefit, these type of machines are the most addictive & expoitative. They probably should be banned, if not taxed a lot more. Tax could also be increased on things like virtual racing and betting on lottery results.

Generali

ninky wrote: »

can anyone explain the logic of this to me?

and if we need to increase tax revenues wouldn't this be a good place to start?

VAT is charged on the difference between the price paid for what is bought and the price paid for what is sold. A bookmaker doesn't buy anything or sell anything as such so no value is added.

I hope that makes sense.

If you want a pragmatic answer, there used to be a gambling tax of 10% payable on the stake or on winnings. Then the internet came along and bookies said either you get rid of the tax or we move to Gibralter. The Government decided to keep the Corporation Tax from bookies while losing the Gaming Tax.

Nosht

Betting Tax lasted for many years, introduced by Harold Wilson along with other outrageous extras such as Selective Employment Tax & Industrial Training Tax, as the Labour Govt. again nearly bankrupted the country with its Jobs For Life Policy in the docks & Index Linked Pensions &c..
It drove much gambling underground & cost a lot to administer & collect.

N.

terryw

kennyboy66 wrote: »

While almost all gambling doesn't really have much of a social benefit, these type of machines are the most addictive & expoitative. They probably should be banned, if not taxed a lot more.

I agree with you about a complete ban on these things. They are the crack cocaine of gambling.