"Good riddance" is not an economic policy

Sky Bet is relocating to Malta where it can enjoy an effective corporation tax rate of around 5 per cent rather than the 25 per cent it is currently paying in Leeds. The move comes after months of lobbying for higher gambling taxes and credible rumours that Rachel Reeves will increase remote gambling duty in next week’s Budget. Gambling operators cannot avoid paying duty on the Gross Gambling Yield generated by customers in the UK (which is essentially revenue, not profit), but they don’t have to be headquartered in the UK.

Since most gambling companies are based offshore and the government has done nothing to dampen talk of remote gambling duty going up from 19 per cent to 25 per cent or more, it should have taken no one by surprise when Sky Bet decided to flee the country. And yet the Chair of the Treasury Select Committee, Meg Hillier MP, was completely blindsided. “I’m pretty astounded,” she told ITV News. “The betting industry appeared in front of the Treasury Select Committee just a couple of weeks ago, extolling the virtues about how much tax they’re paying in the UK. And here we see a company going and offshoring. It rather takes the biscuit doesn’t it?”

The Betting and Gaming Council (BGC) did indeed appear before her committee last month, as I reported at the time, but it takes a tin ear to think that they were merely boasting when they explained that their members pay an effective tax rate of between 65 per cent and 80 per cent. They explicitly said: “The BGC’s role is to highlight to the Committee and the Treasury the negative impacts of any additional tax rises on the whole of the betting and gaming industry and the jobs it supports.” Mrs Hillier apparently misheard this as: “We pay lots of tax and would be delighted to pay some more.”

 

Read the rest at The Critic. 

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