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William Hill Leading Tax Move to Gibraltar


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Simply ‘fed up with too high taxes’ seems to be the main reason why many of
the UK’s largest online gambling concerns are considering leaving the country
for greener, more tax-friendly pastures, and others are actually making the move
like leading bookmaker William Hill, which is off to Gibraltar.

Many see William Hill’s move as a short and sharp ‘wake up call’ for the
government to revisit the online gambling tax issue, because while the
government should not allow itself to be held ransom by gambling companies, it
stands to lose millions of pounds of much-needed future taxable online gambling
revenues.

And the big fear is that if a long-established British gambling firm like
William Hill can pull up its roots and relocate, then what is stopping its
rivals and other gambling companies from following suit? The short answer is
nothing. In fact, rumours are already rampant that Ladbrokes may be hot on the
heels of William Hill.

Although non of these large UK gambling companies want to relocate, many feel
that if they continue to be hampered by exorbitant taxes, they are left with few
options other than to relocate offshore. In order to remain competitive with
William Hill, Ladbrokes would have little choice but to also pack its
bags.

The crux of the problem is that as liberal as the UK is regarding online
gambling – where the popular internet activity is legal and regulated as is the
advertising and marketing  thereof – UK firms are forced to pay higher taxes
than most of their offshore rivals, rivals who are also allowed to market to UK
gamblers.

The difference between the tax rates in the United Kingdom and other countries
is enormous. For instance, UK gambling firms are currently required to pay 15
percent in taxes, while many of their offshore rivals are required to pay as
little as 1.5 percent. And it is this vast discrepancy that is driving out UK
firms.

Isle of Man-based online sports betting firms like Paddy Power and
Gibraltar-based firms like Victor Chandler are reportedly paying as little as
1.5 percent in taxes. Financial analysts expect pre-tax profits of around £133
million from William Hill and about £135 million from Ladbrokes to be announced
shortly.

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