Betting giants caught in tax haven row after being accused of fuelling gambling addiction
Britain’s biggest gambling firms have dozens of offshoots in tax havens, a Mail audit has found.
Paddypower’s owner Flutter, Bet 365 and William Hill all list subsidiaries offshore in locations such as Guernsey, Gibraltar and the Isle of Man in their annual accounts.
The complex corporate structures have raised concerns that the taxman could be losing out.
Tax havens: Paddypower’s owner Flutter, Bet 365 and William Hill all list subsidiaries offshore in locations such as Guernsey, Gibraltar and the Isle of Man in their annual accounts
This week, a report by public policy think-tank, the Social Market Foundation, said most online companies operating in the UK are headquartered in tax havens, and claimed some do not pay corporation tax in full.
In the last two years Bet 365 paid an effective tax rate of 12.7 per cent on profits of £1.4billion.
The rate of corporation tax in the UK is 19 per cent. In its accounts, the online group said the rate was lower because of the ‘difference in tax rate of overseas subsidiaries’.
Four of the firm’s licences to operate in the UK are registered in Gibraltar or Malta, where the effective rate of corporation tax is 10 per cent and 5 per cent respectively.
William Hill, which has six subsidiaries in Gibraltar, said it expected to pay around 12 per cent in corporation tax on its profits in 2020.
Winnings: Bet365 founder Denise Coates took home £323m in pay and dividends last year
Ladbrokes Coral is not required to disclose its tax rate, but one of its two licenses to operate in the UK is registered in Gibraltar.
Its parent GVC paid an effective rate of 3 per cent on profits of £81.5million between 2012 and 2015.
Despite growing into a £4.2billion company, it has booked losses in the last four years.
In 2019 Paddypower and Betfair’s owner Flutter, which was based in Ireland ahead of its merger with the Stars Group, paid 15.9 per cent in tax.
There is no allegation that the firms have broken the law, but the opaque web of companies they deploy makes it almost impossible to check if firms are paying the correct amount.
Matt Zarb-Cousin, director of campaign group Clean Up Gambling, said: ‘This sector is extracting massive profits from Britain while leaving the rest of the country to pick up the bill for the damage.’
Last year the Mail revealed that 32 Red, which is based in Gibraltar, paid just £812,000 in corporation tax in the ten years to 2016 – an effective tax rate of 3 per cent.
To counter the bookmakers’ tactics, the Government brought in remote gaming duty in 2014 – now levied at 21 per cent on revenue.
32 Red’s owner gambling operator Kindred said: ‘Kindred Group and all our brands – including 32Red – pays all taxes required in every market we operate including the UK.’
William Hill said any claim it is avoiding tax is ‘ inaccurate and highly misleading’.
Bet365 said it is a global business headquartered in the UK. It added that its majority shareholders and Bet365 were together the country’s largest tax payers and contributed £446million in tax last year.
A GVC spokesman said: ‘GVC is a global business. Nevertheless, group companies paid more than £2.5billion of UK taxes from 2015 – 2019 , making it one of the top 20 largest taxpayers in the country.’
Flutter declined to comment.