Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 12: POOL BETTING DUTY
SUMMARY
1. Clause 12 and Schedule 4 make provision for the Betting and Gaming Duties Act 1981 to be amended by substituting new provisions for pool betting duty and by making coupon betting liable to general betting duty instead of pool betting duty. Pool betting duty will be charged on a person's net pool betting receipts. The change has effect from 31 March 2002.
DETAILS OF CLAUSE
2. Subsection (1) provides for Schedule [j602] to have effect.
3. Subsection (2) describes the effect of each Part of the Schedule.
4. Subsection (3) provides for commencement of paragraph 2 of the Schedule.
5. Subsection (4) provides for commencement of paragraphs 3 and 4 of the Schedule.
6. Subsection (5) deems subsections (1) to (4) of the Clause (subject to subsection (6) and (7)) to have come into force on 31st March 2002.
7. Subsection (6) deems other provisions in the Schedule, including but not limited to the amendment of section 9 of the Betting and Gaming Duties Act 1981, to have come into force on 24 April 2002.
8. Subsection (7) provides for the new regulation-making provisions to come into force on the day the Act is passed, and to be exercisable for the purpose of accounting periods beginning after that date.
9. Subsection (8) identifies the new regulation-making provisions.
DETAILS OF SCHEDULE
Part 1
10. Paragraph 1 provides for the Betting and Gaming Duties Act 1981 to be amended.
11. Paragraph 2 provides for sections 6 to 8 of the Betting and Gaming Duties Act 1981 to be substituted by new sections 6 to 8C.
12. Section 6 provides for the charge to pool betting duty.
13. Section 7 charges pool betting duty at the rate of 15% of the amount of a person's net pool betting receipts where, in any accounting period, those receipts are greater than zero.
14. Section 7A specifies the amount of a person's net pool betting receipts for an accounting period.
15. Section 7B defines the meaning of the term ?dutiable pool bet?. The section sets out the conditions that determine when a bet is a dutiable pool bet, the receipts from which must be used to calculate a person's net pool betting receipts.
16. Section 7C specifies the payments to be treated as stake money for the purposes of calculating a person's net pool betting receipts.
17. Section 7D(1) applies the succeeding subsections for the purpose of determining when stakes fall due for the purposes of the calculation of net pool betting receipts under section 7A.
18. Section 7D(2) states that for the purposes of the calculation under section 7A bets made in respect of a single event or multiple events taking place on the same day, stakes fall due on the day of the event.
19. Section 7D(3) states that for the purposes of the calculation under section 7A (subject to subsection (5)) stakes not covered by subsection (2) fall due on the day when the bet is made.
20. Section 7D(4) states when subsections (2) and (3) have effect in relation to a sum irrespective of when it is actually paid or required to be paid.
21. Section 7D(5) states, for the purposes of the calculation of net pool betting receipts under section 7A, when stakes fall due if these were made before 31st March 2002 and where at least one event takes place before that date and at least one on or after that date.
22. Section 7D(6) provides for Customs to make regulations in respect of when stakes fall due for the purposes of the calculation of net pool betting receipts under section 7A.
23. Section 7D(7) sets regulatory parameters for the earliest and latest timing of when stakes can fall due.
24. Section 7D(8) describes the extent of Customs regulation-making powers under subsection (6).
25. Section 7E(1) applies the succeeding subsections for the purpose of calculating the expenses and profits component of the net pool betting receipts calculation under section 7A.
26. Section 7E(2) identifies (subject to subsection 3) those persons whose expenses and profits are to be included in the calculation under section 7A.
27. Section 7E(3) identifies expenses and profits not for inclusion in the calculation under section 7A.
28. Section 7E(4) provides for Customs to make regulations in respect of attributing expenses and profits to an accounting period for the purposes of the calculation under section 7A.
29. Section 7E(5) describes the extent of Customs regulation-making powers under subsection (4).
30. Section 7F(1) applies the succeeding subsections for the purpose of calculating the winnings component of the net pool betting receipts calculation under section 7A.
31. Section 7F(2) describes the circumstances in which winnings held in an account for a person are to be included in the calculation under section 7A.
32. Section 7F(3) allows for the return of stakes to be treated as payment of winnings for the purposes of the calculation under section 7A.
33. Section 7F(4) provides that only money shall be taken into account as winnings for the purposes of the calculation under section 7A.
34. Section 7F(5) excludes for the purposes of the calculation under section 7A those winnings in respect of bets made before 31st March 2002, where at least one event takes place before that date, and at least one on or after that date.
35. Section 7F(6) provides for Customs to make regulations in respect of when amounts paid by way of winnings are to be treated as being paid for purposes of the calculation under section 7A.
36. Section 7F(7) describes the extent of Customs regulation-making powers under subsection (6).
37. Section 8(1) specifies when pool betting duty is due, in addition to making provision for payment of duty.
38. Section 8(2) specifies the persons from whom pool betting duty may be recovered.
39. Section 8(3) provides for Customs to make regulations in respect of when and how duty is to be paid.
40. Section 8(4) describes the extent of Customs regulation-making powers under subsection (3).
41. Section 8A(1) and (2) describes when bets qualify as being ?for community benefit? (subject to subsection (3)).
42. Section 8A(3) allows Customs to direct that any bet specified or of a description so specified is not for community benefit.
43. Section 8A(4) describes the circumstances in which Customs may exercise the power of direction under subsection (3).
44. Section 8A(5) and (6) define the term ?community society?.
45. Section 8B(1) identifies the accounting period for pool betting duty and provides for Customs to make regulations to provide for a different accounting period which would supersede this.
46. Section 8B(2) describes extent of Customs regulation-making powers under subsection (1).
47. Section 8C(1) excludes the taking of a ticket or chance in a lottery from the provisions at section 6 to 8A.
48. Section 8C(2) states that for the purposes of sections 6 to 8A, where payments are made for the chance of winning money or money's worth on terms under which those making the payments have a power of selection that may - directly or indirectly - determine the winner, those payments are treated as bets for the purposes of the charge to pool betting duty, even if the power of selection is not exercised.
49. Section 8C(3) excludes any bet or stake hazarded in the cause of, or incidentally to, any gaming from subsection (2).
50. Section 8C(4) states that where a payment entitles a person to take part in a transaction which he does not consider to be a pool bet because he does not regard the payment as being a stake, the transaction is nevertheless treated as a bet for pool betting purposes.
51. Paragraph 3 and 4 remove provisions that would otherwise preclude coupon bets from being charged with general betting duty.
52. Paragraph 5 to 7 make changes to section 9 of the Betting and Gaming Duties Act 1981 consequent upon bringing coupon betting under general betting provisions.
53. Paragraph 8 deletes the definition of coupon betting.
54. Paragraph 9 provides for the omission of an exception that applied to coupon betting.
55. Paragraph 10(1) provides for the amendment of Schedule 1 to the Betting and Gaming Duties Act 1981.
56. Paragraph 10(2) amends the definition of the term ?pool betting business? to include a business that consists only in pool betting for community benefit.
57. Paragraph 10(3) provides for Customs to be responsible for the care and management of pool betting duty and to make regulations concerning the administration and enforcement of pool betting duty, and protection of the revenue.
58. Paragraph 10(4) makes an amendment consequent to the provision at sub-paragraph (3).
59. Paragraph 10(5) to (14) makes other minor consequential amendments to Schedule 1 of the Betting and Gaming Duties Act 1981.
Part 2
60. Paragraph 11 makes a consequential amendment to section 1(3) of the Excise Duties (Surcharges or Rebates) Act 1979.
61. Paragraph 12(1) to (3) provide for consequential amendments to Paragraph 6 of Schedule 5 to the Finance Act 1994 subjecting directions made by Customs to provisions for review and appeal.
62. Paragraph 13(1) to (5) provide for transitional arrangements in connection with duty charged prior to 31 March 2002.
63. Paragraph 14 provides for those notifications of premises used in connection only with coupon betting made prior to 24 April 2002 to be treated as a notification under general betting provisions (section 4(3) of Schedule 1 to the Betting and Gaming Duties Act 1981) effective from 31 March 2002.
BACKGROUND
64. Pool Betting Duty (PBD) was previously charged on stake money received by a pool promoter (plus certain expenses and profits) at a rate of 17.5 per cent. In certain circumstances, there was a limited duty relief for charities and some local sports clubs who ran pool betting.
65. The new duty system, effective from 31 March 2002, will tax the pool promoters? gross profits (net pool betting receipts) and exempts all qualifying charities and non-profit making sports clubs. The new duty system is similar to the new general betting duty system the Government introduced in the Finance Act 2001.
66. The change will cost the Government £5 million per annum in cash terms.
back to top