Bookies escape budget tax increases
Posted by Epiphany Solutions on 27 Apr 2009 at 15:04
Bookmakers appeared to be among the few winners from the budget after they escaped a tax rise, prompting a spike in shares for some companies.
Bingo operators were the losers as VAT was scrapped on bingo but gross profits tax on the game went up, to the anger of some gaming executives.
However, there was no hike in the gross profits tax for bookmakers, which saw Ladbrokes shares go up 7.7 per cent to 212p and William Hill go up 6.8 per cent to 188.12, according to Interactive Investor.
Some investors had been concerned about the possibility of the gross profits tax also going up for bookmakers, which currently stands at 15 per cent for bookies.
The rate was expected to be affected by increases announced by the chancellor as he tries to raise cash to pay off a mountain of national debt by upping duty and cutting spending.
However gaming operator Rank was among firms looking at a bigger outlay after the government upped gross profits tax on bingo from 15 to 22 per cent.
Bingo companies had been campaigning for VAT on the game to be scrapped. This wish was granted but operators were left reeling after the tax rise hit any bonus which might be felt from this.
Bingo overall has been suffering of late, with a number of bingo halls closing following the smoking ban and the arrival of the recession.
Interactive Investor quoted Paul Leyland of Collins Stewart as saying: "This is a good Budget for bookies because a lot of people were worried that they would turn to the gross profits tax to raise money and they haven't.
"But it's bad for bingo because while VAT is going, the gross profit tax is going up to 22 per cent."
