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CLAUSE 6 : GENERAL BETTING DUTY
INTRODUCTION
1.
This clause and Schedule 1 make provision for changing the basis upon
which the amount of general betting duty is calculated and expand
the scope of the duty. The changes are intended to take effect no
later than 1 January 2002.
DETAILS OF CLAUSE
2.
Clause 6. The clause provides that Schedule 1 shall have effect
and also for commencement in accordance with such provision as the
Commissioners may make by order made by statutory instrument.
DETAILS OF SCHEDULE 1
3.
Schedule 1 of this Bill is divided into four paragraphs.
Paragraph
1 replaces Sections 1-5 of the betting and Gaming Duties Act 1981
with new sections 1-5D. The new sections 1-5D are explained below:
4.
Section 1 imposes a new charge to general betting duty.
5.
Section 2(1) charges general betting duty on bets made with
bookmakers in the United Kingdom.
6.
Section 2(2) defines the exceptions to section 2(1).
7.
Section 2(3) prescribes the rate of general betting duty, 15
per cent, that applies to bets charged with duty in accordance with
s2(1) above. This rate shall be charged against the bookmaker’s net
stake receipts in each accounting period.
8.
Section 3(1) makes provision for the charging of general betting
duty on spread bets when they are made with a permit holding bookmaker
in the UK.
9.
Section 3(2) defines a spread bet for the purposes of general
betting duty.
10.
Section 3(3) prescribes different rates of general betting
duty for financial spread bets and other spread bets. Financial spread
bets will be charged at 3 per cent of a bookmaker’s net stake receipts.
All other spread bets will be charged at 10 per cent.
11.
Section 3(4) delineates a financial spread bet from
other spread bets for the purpose of general betting duty.
12.
Section 3(5) makes provision for Customs to make an order providing
that a specified matter is to be treated as a financial matter or
make an order providing that a specified matter is not to be treated
as a financial matter. They make such an order for the purpose of
section 3(4) above. Because the definition of a financial spread
bet in section 3(4) depends on identifying the subject matter of the
bet as financial, specifying whether a particular matter is, or is
not, a financial matter determines the issue of whether a bet relating
to that matter is a financial spread bet.
13.
Section 4 charges general betting duty on other forms
of betting at an amount equal to 15 per cent of a person’s
net stake receipts. These are:
- sponsored pool betting
- bets made
through facilities provided by the Horserace Totalisator Board
(The Tote); and
- bets made
by means of certain on-track totalisators.
By
way of clarification, while totalisator betting on horseraces and
dog races is a form of pool betting it is subject to a charge to general
betting duty rather than pool betting duty so as to be treated on
the same basis as fixed odds betting with bookmakers on the same events.
The
provisions of this section do not apply to on-course bets, which are
exempt from general betting duty, or coupon betting, which is liable
to pool betting duty.
14.
Section 5(1) introduces the definition of a person’s net stake
receipts for an accounting period as the total amount due to him for
each class of bets made with him in that accounting period, minus
the total amount of winnings paid out by him for each class of bets
made with him in that period i.e. (money due - winnings paid).
15.
Section 5(2) For bets other than spread bets,
where the amount a bettor can lose is known when the bet is made ,
that amount shall be regarded as being due for the purpose of determining
the amount of bets made under section 5(1)(a) regardless of whether
it has actually been paid.
16.
Section 5(3) provides that no general betting duty will be
charged if the amount of net stake receipts is zero or a negative
amount.
17.
Section 5(4) prevents any reductions being made when calculating
the aggregate amount of money due in respect of bets made in any period.
If a bookmaker requires a customer to make any separate payment to
secure an entitlement to make a bet he shall account for the aggregate
sum paid or due to be paid by the customer, not merely the part that
might be designated as the stake.
18.
Section 5(5) makes provision for the notional value of any
‘free bets’, or the value of any discounts offered, to be included
when calculating the amount due in respect of bets. It follows that
any winnings paid out in respect of such ‘free bets’ will be included
in the calculation of net stake receipts.
19.
Section 5(6) expands on section 5(1)(b) and provides that the
calculation of amounts paid as winnings shall include the payment
of winnings to a customer’s account. . Additionally, this section
allows for the return of customers’ stakes to be regarded as winnings
(this will void any duty liability if e.g. an event is cancelled)
but in either case only payments of winnings in money can be taken
into consideration: non-monetary prizes cannot be used to reduce the
net stake receipts.
20.
Section 5(7) This section ensures that the provisions relating
to the calculation of net stake receipts apply equally to those persons
providing facilities for making the types of bets described at s4(1)-(3).
21.
Section 5A deals with ‘multiple’ bets and makes a distinction
between those that are treated as one bet and those that are treated
as a series of bets. Bets caught by s5A(1) and (2) are regarded as
a series of bets with stakes and winnings to be accounted for at each
stage while bets excepted from subsections (1) and (2) by s5A(3)
are regarded as a single bet with only one stake and one lot of winnings
to be accounted for
22.
Section 5B deals with the liability to pay general betting
duty.
5B(1)
makes provision for the duty to become due at the end of each accounting
period. For bets made with a bookmaker, 5B(2) makes the bookmaker
the person responsible to pay the duty that has become due under 5B(1).
While the bookmaker is responsible for payment, 5B(3) allows
for the recovery of duty from (a) the holder of the permit for the
business, (b) the manager of the business, or (c) a director, if the
bookmaker is a company. For bets made by way of sponsored pool betting,
or by means of facilities provided by the Tote, or by means of certain
on-track totalisators, 5B(4) provides that the duty shall be
paid by the person who provides the facilities.
The
provisions of Section 5B are without prejudice to any Regulations
made under paragraph 2 to Schedule 1 of the Betting and Gaming Duties
Act 1981 for the administration or enforcement of general betting
duty.
23.
Section 5C introduces the concept of ‘bet-brokers’ “bet-takers”
and “bettors”. The provisions of this section apply where-
(a)
a bet-broker, in the course of business, facilitates the making of
bets between a bettor and bet-taker, and
(b)
the bet broker, in the course of business, makes a bet with a bet-taker
as the agent of a bettor.
24.
Section 5C(2) makes provision for bet brokers to be regarded
as bookmakers for the purpose of general betting duty when they facilitate
the making of bets between others. When bets are made via a bet broker,
the bet broker is deemed to step into the shoes of the “bet taker”
(ie the person offering odds about an event) and calculate the net
stake receipts as if the bet had been made with him and as if he had
paid out the winnings himself.
25.
Section 5C(3) describes the situations where 5C(2) does
not apply. In these situations the provisions of Section 5C(4) will
come into force. 5C(4) prevails if:
·
(a) the bet-taker holds a bookmaker’s permit, and
·
(b) if the bet had been made by the broker with the bet taker the
bet would be an off-course bet by reason of the fact that the bet-taker
is not on-course.
26.
Section 5C(4) makes provision to hold both the bet broker and
the bet taker liable to general betting duty at the same time. Under
5C(4) the bet broker and bet taker shall calculate their net stake
receipts on the basis of -
(a)
the amounts due to be paid by the bettor, and
(b)
the winnings paid by the bet taker.
This
subsection is intended to prevent bookmakers from avoiding their duty
liability by operating via a broker thereby passing their liability
to the bet broker.
27.
Section 5C(5) provides that Section 5C shall not apply to pool
betting, or to bets made via the facilities offered by a person holding,
and relying on, a betting agency permit issued under the terms of
the Betting Gaming and Lotteries Act 1963 - the holder of such a permit
is not allowed to accept bets on his own behalf.
28.
Section 5C(6) provides that, in cases where there is doubt
as to which party is the bettor and which is the bet taker, the person
who was first to offer the bet via the bet broker shall be regarded
as the bet taker.
29.
Section 5D defines an accounting period for the purpose of
general betting duty as a calendar month, or any other period specified
in Regulations made by Customs for the administration or enforcement
of general betting duty. Such regulations may make provision to general
or specific persons or classes of person, for different purposes and
for transitional arrangements.
30.
Schedule 1 Paragraph 2 amends section 6(1) of the Betting and
Gaming Duties Act 1981 to reflect the newly substituted sections 1-5D
introduced by this Bill.
31.
Schedule 1 Paragraph 3 amends s9(3) of the Betting and Gaming
Duties Act 1981 to reflect the newly introduced sections 1-5D.
32.
Schedule 1 Paragraph 4 removes paragraph 2(4)(b) and (c) to
Schedule 1 of the Betting and Gaming Duties Act 1981. Adequate powers
regarding record keeping are found elsewhere in the customs and excise
Acts.
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