Matthew Hancock calls for racing tax loophole closure

Matthew Hancock Image copyright bbc
Image caption Matthew Hancock says changes are needed to protect the racing industry

Millions of pounds have been lost in tax and betting duties simply because bookies have relocated offshore.

That's got to change, says Matthew Hancock, before the racing industry is forced into decline.

The Conservative MP for West Suffolk, whose constituency includes Newmarket, is calling for a change to the gambling tax loophole.

"£62m has been lost in betting duties," he told minister John Penrose during a Westminster Hall debate.

"Of the 20 biggest bookies, only two are domiciled here in the UK."

Mr Hancock wants the offshore loophole dealt with to solve the problems of financing the racing industry.

His proposal? To change the location of a bet from where the bookie is based to where the punter is based.

He believes if it were a level playing field and all the betting competitors paid the chunk of tax and levy they should, then it would help fund the industry on which their business relies.

"I don't believe in tempting people to pay tax. I believe in ensuring people pay tax," he said and appealed to the minister to look at horse racing as a matter of urgency.

"Widening the regulatory net, which I support for all gambling in the UK, is not as urgent as closing the tax and levy loophole," he chided.

"Only once we tackle offshore problems can we move on to wider issues."

Decline fears

The debate was well attended and the assembled cross party MPs maintained that the UK had dropped to 38th in the world racing ranks, and prize money had halved in the last two years.

The minister was told that if the industry continued to be deprived of funding it would hit breeding programmes, veterinary services and prize money.

Ultimately horses would be trained abroad, causing a decline in, arguably, "our number one sport".

Mr Penrose replied that funding the racing industry had been a problem for 51 years.

He pledged that 50% of the money raised by the sale of the Tote would, as promised, go to the industry and that the details are close to being finalised for that scheme.

"We aim to change the way the offshore bookies are regulated. We want to switch it so that anyone anywhere in the world will have to have a British gambling licence, which would put them all in the British regulatory net."

Tenacious campaign

Although he made no definite promises to close the offshore loophole Mr Penrose said that the government was making progress in its search for a successor to the levy.

"If we can come up with something enforceable and sustainable, then we will have racing as a 'normal' sport," he said and promised that the government wanted to do it.

Image copyright PA
Image caption MP Matthew Hancock has fought a tenacious campaign to reform racing's finances

Mr Hancock, who has fought a tenacious campaign to reform racing's finances, told me he was not disappointed with the outcome.

"I do think it was a positive debate. I was not expecting a firm commitment and the minister needs to find a slot in the timetable."

Nevertheless, Mr Hancock believes he was impressed with the broad level of support for changes in the industry and is convinced that the will is there to do something soon.