The UK's leading bookmakers are to take their online operations offshore to cut down on their tax bills, according to weekend reports. The Sunday Times said William Hill was preparing to announce it was shifting its internet betting operations to Gibraltar in a move that will save it millions of pounds in tax. UK-based betting firms have complained to the Treasury that they have to pay 15 per cent tax, compared to the 1.5 per cent paid by their offshore rivals. Media reports also said William Hill's rivals - notably Ladbrokes and Coral - would follow suit.
The news is not a huge surprise, given that Ralph Topping, William Hill's chief executive, has publicly criticised the Government's attitude towards gambling duty. Both William Hill and Ladbrokes will reveal their plans when they announce interim results this week. The Daily Mail said a flood of firms going offshore would be a 'major embarrassment for the Government'.
Who are the PR players?
William Hill and its recently appointed head of investor relations Lyndsay Wright last month reappointed Brunswick as its financial PR firm after a multi-agency pitch. Ladbrokes handles its corporate and financial PR in-house, led by head of PR Ciaran O'Brien.
What happens next?
Companies cutting tax bills can see their reputations taking a knock. But those in the industry are warning of the difficulties of competing with offshore online betting firms. Censure is likely to fall on the Government, but firms will have to answer criticism within horse-racing that they are taking money from it, as offshore bookmakers are not liable for Levy tax, under which ten per cent of profits are returned to racing. 15% - Tax UK-based betting firms have to pay.