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 Alex Hawkes |
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| • Move
allows Betfair to avoid UK's 15% tax on betting profits • Savings of around £18.5m a year expected • Company's 1,200 UK-based staff will not relocate Betfair is to move to operate under a Gibraltar licence as part of changes that will allow it to avoid the UK's 15% tax on gross betting profits. The shift away from operating under a UK gaming licence is expected to save the online betting exchange £18.5m a year in tax. The company's 1,200 UK-based staff will not relocate to Gibraltar, though. Betfair also said it would still pay the British horse racing levy despite moving its licensing abroad. "Betfair will continue to support British horse racing by committing the same amount of money to the sport that the company has been paying via the statutory levy for the remainder of the 49th Levy Scheme and on the terms set out for the 50th Levy Scheme," it said in its interim management statement on Tuesday morning. The horse racing levy is charged on those with UK gambling licences. The company said on Tuesday that while there were clearly tax advantages to the shift, it would also allow it to consolidate its technology platforms. "Betfair continually strives to create the best technology platform for the business. This revised structure will provide the company with the freedom to locate key technical equipment in more efficient locations in order to improve service to customers and compete on a level basis in the UK market." Betfair will join a host of bookmakers who have shifted offshore to escape the government's gambling levy. Both Ladbrokes and William Hill have situated some of their online operations in Gibraltar, while even the government-owned Tote runs casino and bingo from Alderney, and its poker site from Malta. Betfair has not officially revealed how much tax it will save, saying in its statement that it will improve its profits by £10m in 2012, after taking costs into account. In the three month period covered by the interim statement, Betfair also said that revenues were up 6.2% on the same period a year earlier. Poor weather, which hit the number of race meetings, did hold the company back but it is hoping for a strong fourth quarter, with the Cheltenham Festival, the Grand National and the conclusion to the football season all imminent. |
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