Gross double standards regarding the gambling industry

Amazon are one of the many large companies that are allowed to continue paying tax on the point of supply.

We often hear about the immorality of tax evasion. Certainly, it is an issue that irritates people. And, in all fairness, why shouldn’t it? People work hard, and don’t necessarily like the government taking from them. I know I certainly don’t. And, I suspect, you don’t much, either.

Tax is one of those life certainties, though; kind of similar to death, in that sense. Indeed, I’m sure there is an old saying somewhere that there are only two certainties in life: death and paying tax. Doubtless, I am sure you have already heard that human mortality stands at 100%. (Although who knows how long this’ll be the case with the way science is progressing.) However, paying tax is not at 100%, since unlike death, it is something which is possible to escape.

And escape many do. For instance, just very recently it was revealed that, a whole host of celebrities had sheltered money from the government through a Liberty Tax Scheme. Figures involved included musicians, such as the Arctic Monkeys, Katie Melua, and George Michael.  I don’t particularly like their music, so I can’t fake outrage by boycotting their records – although doubtless some will do so. Anyhow, the debates and issues surrounding the morality of avoiding paying tax, however, is one I’ll save for another day. I fear too many digressions and I’ll lose you reader; that is, if I haven’t already.

You may, if you were fortunate enough, have already read yesterday a piece on Two Little Fleas that I wrote on the Point of Consumption Tax. If you haven’t already had the pleasure, it can be found here.  This tax will be arriving in December this year, to the delight of every British gambling company. (That was sarcasm by the way, reader, just in case you didn’t realise.)

In short, as it stands today, gambling companies are taxed on their profits in the country that they are based, and most gaming companies are not based in the UK. Their licences are normally held in a variety of other countries, such as Guernsey, the Isle of Man and so forth – the list goes on. The British government – for better or for worse – have decided they want a great chunk of this money, and thus decided to start taxing on where the bets and wagers are actually placed by their customers. This is the Point of Consumption Tax – which is also known as the 15p tax. This will be the law come December.

While I argued yesterday that it will not raise as much money for the Treasury, as its proponents believe it will. I believe that it will simply drive players to play on illegal sites, which they can do easily, by the way. However, what I find offensive about this vicious government intervention is that it displays a grotesque double-standard.

“How? Why?” I hear you cry. Well, let me explain.

The British treasury are displaying a gross double-standard with their attacks on the gambling industry.

In the UK today, we have several gargantuan firms operating who pay no tax. Indeed, it was revealed in 2013 that, the government is losing more than a £1 in every £10 it tries to collect from companies to tax evasion and avoidance. These are official figures revealed in a report from HM Revenue and Customs. This costs the public purse £4.7bn a year. Shocking stuff, eh? What is even more surprising, however, is that the real loss is believed to be significantly higher, as HMRC does not count controversial “profit shifting” schemes – run by companies such as Google, Amazon and Starbucks – as tax avoidance.  One economist estimates that the real cost of tax avoidance is potentially as much as £12bn a year.

Amazon, for instance, is based in Luxemburg, which means that it does not pay tax on its sales in the UK. This is, despite the fact that, its UK business employs 4,200 people at the end of 2012, compared to 380 in Luxemburg.

So why, I ask, if the government are going after the gambling firms who base their operation outside of the UK, have they not done the same to these vast multinationals, who turn over a truly colossal amount of money?

Why indeed. But when you look at this government move for what it actually is, it all becomes much clearer. Culturally, gambling is held in disdain (it always has been), and is frowned upon by none more so than the upper echelons of society, who see it as a curse of the working classes.

So it is easy for politicians to clamp down and punish the tax policies of something it doesn’t like, but when it comes to Google, Amazon, and Starbucks, among others – they don’t care.

Ladies and gentleman, this is a gross double-standard.