Salford billionaire and co-founder of BetFred, Fred Done, says a potential new gambling tax increase proposed by Chancellor Rachel Reeves could cost up to 7500 jobs in his company and could see the closure of every one of their UK shops.
Last month, the Chancellor indicated that she is considering raising levies on gambling companies, saying “there is a case for gambling firms paying more”. This move is likely an attempt to close a potential £30bn shortfall in the public finances.
The Public Policy Research think tank estimated that a 50% tax on the industry could raise over £3 Billion. Funds which former Labour Prime Minister and Chancellor Gordon Brown said could be directed towards child poverty in order to aid a decrease. In his article for The Guardian, Brown also said that “The government can fulfil today’s unmet needs by taxing an undertaxed sector.”
BetFred have multiple locations in Salford, most notably a shop at the Salford shopping precinct. The proposed tax hike on gambling companies could see those locations and jobs at those locations put at risk, according to Done’s claims.
Interview via BBC – Bing Videos
Done told the BBC that he thinks the potential tax rise “is the biggest threat I’ve ever known since I’ve been in the industry.” He added that the overhead costs for his betting shops have already increased by £20 million over the last year due to rises in national insurance, national minimum wage and the living wage, putting strain on the betting giant.
The Salford born billionaire believes BetFred would not have “one singular shop” by 2028 if the new tax increase goes forward in the autumn budget.
The Financial Times reported that around 330 of BetFred’s high street shops are already lossmaking; and that in a letter seen by them, BetFred have written to Rachel Reeves, saying increased levies “would produce the opposite of their intended effect: reducing tax revenue, [and] accelerating black market growth”.
Image via WikiMedia Commons – Betfred,_Putney,_London.JPG (4159×3163)
BetFred Chief executive Joanne Whittaker has reportedly requested a meeting “at the earliest opportunity” with the Chancellor.
Whittaker told The Sunday Times that the company is modelling “the worst case scenario” ahead of the autumn budget – “This is not scaremongering… it’s a business reality. The most frightening element is we’re going to lose the whole retail business.”
The budget will be announced and detailed on the 26th November by Reeves, and Whittaker believes that changes to the gambling tax rates would damage the Treasury’s own tax take by forcing customers to unregulated operators. “If these rates go through, the reality is we won’t have a business left to tax.”
We will have to wait until Reeves outlines the autumn budget, but it could be the end of the road for a UK giant.