Notice

Excise Notice 451: General Betting Duty

Published 1 April 2010

This notice was withdrawn on 20 August 2015

This notice 451 is out of date and should not be used. Please read Excise Notice 451: General Betting Duty (pre 1 December 2014).

This notice 451 is out of date and should not be used. Please read Excise Notice 451: General Betting Duty (pre 1 December 2014).

Foreword

This notice cancels and replaces Notice 451 (April 2007). Details of any changes to the previous version can be found in paragraph 1.1 of this notice.

Paragraph 7.3 of this notice explains a bookmaker’s record keeping requirements, which has the force of law under the Betting and Gaming Duties Act 1981, Schedule 1, paragraph 6(1) and (2). This paragraph is indicated by being placed in a box.

Example:

The following rule has the force of law

Vouchers, letters and other papers, telephone

(1) For off-course bets made with you by:

• a bettor in person - you must keep a copy of the voucher (betting slips) you issue to that person

Further help and advice

If you need general advice or more copies of HM Revenue and Customs (HMRC) notices, please phone the helpline on Telephone: 0300 200 3700. You can call Monday to Friday, 8am to 8pm.

If you have hearing difficulties, please phone the Textphone service on Telephone: 0300 200 3719.

If you would like to speak to someone in Welsh, please Telephone: 0300 200 3705, Monday to Friday, 8am to 6pm.

All calls are charged at the local rate within the UK. Charges may differ for mobile phones.

Other documents on this or related subjects

Notice 206 Revenue traders accounts
Notice147 Pool betting duty
Notice 454 Amusement Machine Licence Duty (AMLD)
Notice 700/1 Should I be registered for VAT?
Notice 209 Civil penalties: fixed, geared and daily

Form BD75 General Betting Duty - notification to carry on a general betting business

Form L222 Application for Amusement Machine Licence Duty

Factsheet HMRC1 HM Revenue and Customs decisions - what to do if you disagree

1. Introduction

1.1 What is this notice about?

It explains:

• who has to account for General Betting Duty (GBD)
• which bets are liable to duty
• how duty is calculated
• the circumstances in which bets received at meetings by an on-course bookmaker or totalisator operator are liable to duty
• what records and accounts you must keep and
• our legal powers

1.2 What are the changes?

This notice has been completely rewritten and reflects various changes and additions as follows:

• Gambling Act 2005 which fully became law on 1st September 2007 (paragraph 1.6).
• overlap with the social regulatory law (paragraph 1.7)
• guidance for overseas residents operating a bookmaking business in the UK (paragraph 2.6)
• function and location of the National Registration Unit (section 3)
• relocation of the Accounting Centre (paragraph 5.2)
• bank account details for electronic payments (paragraph 5.4)
• Introduction of the new penalties framework from 1 April 2010 (paragraphs 3.6, 5.6 and 5.7)
• reviews and appeals (section 13)

1.3 Who should read this?

This notice is aimed at all bookmakers, betting exchanges and anyone else involved in general betting.

1.4 What is GBD?

It is a duty charged on the ‘net stake receipts’ (see paragraph 2.5) from bets made:

• with a UK-based bookmaker, other than on-course betting (see paragraph 2.4)
• by way of pool betting only on horse racing or dog racing through a UK-based promoter, by means of a totalisator situated in the UK, other than on-course betting
• through a UK-based bet-broker
• through a UK-based betting exchange

1.5 What are the rates of GBD?

These are:

• 15% for fixed odds bets and totalisator bets
• 15% on charges relating to bets taken through a betting exchange (see section 9)
• 3% for financial spread bets* and
• 10% for all other spread bets
• a spread bet is one that is covered by a contract that is a regulated activity within the meaning of section 22 of the Financial Services and Markets Act 2000. A financial spread bet must be the subject of a financial matter

You can check the current rates with our Excise and Customs helpline on Telephone: 0300 200 3700, or on the HMRC website.

1.6 The Gambling Act 2005

It currently contains separate requirements for both general betting operating and premises licences. If you have any queries about this law or your licences, please consult the:

The Association of British Bookmakers (ABB) is the principal trade association for bookmakers and they are also happy to answer any queries. You can contact them via their website.

1.7 Overlap with social regulatory law

It is the GBD legislation which determines the duty treatment. All the gambling duties are self assessed taxes and a taxpayer is obliged to calculate, notify, and pay any duty due. If a taxpayer has queries about their GBD they should refer to guidance issued by us. We will answer individual queries from taxpayers. If we give a ruling, then in some circumstances a taxpayer is entitled to rely on that ruling even if it is later shown to be wrong. However, a taxpayer is not entitled to rely on an opinion, or any guidance written by the social regulator, even if the opinion relates to an identical piece of legislation.

2. Definitions

2.1 Who is a bookmaker?

A person who:

• carries on a business receiving or negotiating bets
• holds himself out to be a bookmaker.
• if a bookmaker is resident outside the UK - see paragraph 2.6.)

2.2 Who is a bet-broker?

The term bet-broker applies to anyone who:

• provides facilities enabling one person to bet against another
• makes or takes a bet on behalf of someone else

The activities covered by bet brokers do not include:

• betting exchanges - (see paragraph 2.3 and section 9)
• the provisions of facilities for pool betting (see paragraph 2.4)

2.3 What is a betting exchange?

A betting exchange is defined in law as a business that:

• provides facilities to allow other parties to bet with each other and
• does not provide premises that can be used by anyone making or taking bets

2.4 What are on-course bets?

These bets are taken:

• at a horse or dog race meeting where both the person making the bet and the bookmaker or totalisator operator accepting bets are present
• from a UK bookmaker, who is not at the meeting, but who makes hedged bets with a bookmaker who is present at the meeting

All other bets, usually referred to as off-course bets, are liable to GBD, including bets made by anyone on behalf of a punter who is not present at a meeting.

2.5 What are ‘net stake receipts’?

Your net stake receipts are effectively your gross profits from bookmaking. It includes the total amount of:

• money due to you for dutiable bets made with you in an accounting period less
• money paid out by you in respect of winning dutiable bets in the same accounting period

2.6 Must a bookmaker be resident in the UK to be liable to GBD?

No. The law does not provide that you have to be resident in the UK in order to be a bookmaker in the UK for GBD purposes. It is therefore possible for you to be resident outside the UK but be carrying on business as a bookmaker in the UK. A company may not be liable in the UK for corporation tax but still be a bookmaker in the UK for the purposes of GBD.

Whether you are carrying on the business of receiving or negotiating bets, or conducting pool betting operations in the UK, is a question of fact. We will assess each case and the weight we give to any particular factor will depend on each particular case.

To carry out this assessment we will consider your individual circumstances and build up a picture of where and how the business of receiving or negotiating bets is actually run over a period of time. We will take the following factors into account, but this list is not exhaustive:

• where your business is a company, the place of incorporation
• the company’s constitution (that is, the memorandum and articles of association, or equivalent documents). The constitution will provide for:- how the company’s business is managed and controlled- who is responsible for the management and control of the company’s bookmaking business and- where that person, or persons are located
• how your business is organised, operated and administered. To establish this, it will be necessary to identify the ingredients your business of receiving and negotiating bets and where each of these ingredients is provided, in particular, whether any of these ingredients are provided in the UK
• who is responsible for the management and control of this business and who takes the key decisions with regard to it and where they are located. In practice this may not be the same as the structure provided for in any company constitution
• where and how are the transactions relating to receiving and negotiating bets carried out and effected (that is, whether by phone (such as a call centre), the internet or some other form of remote communication). This will involve analysis of your communication and IT systems, to establish for example, where and how bets placed over the internet are accepted, rejected, settled and otherwise processed and to what extent any of these transactions are happening in the UK
• where staff are located and whether any are in the UK. Where there are staff in different locations, it will be necessary to identify the responsibilities of staff in each location to establish, in particular, whether they are responsible for any decisions in relation to the operation of the bookmaking business and if so, what those decisions are
• where the premises are located and what they are used for, both in relation to the staff and any equipment necessary to carry on the business. Do they include computer servers and systems related to back up and disaster recovery?
• where the bets are settled and the betting receipts are paid and processed.
• how the odds are set and where that takes place
• where and how risk is managed. For example, are bet limits for individual customers controlled by: - a computer system (and if so where is that system located), or - staff such as trading managers located in the UK?
• in relation to your overall exposure to your bookmaking business, where is that risk monitored and tracked?
• whether any related companies such as a:- parent company- subsidiary, or - company within the same group of companies

provides any of the ingredients of the business referred to at 3(c) above. If so it will be necessary to consider the nature of the ingredient where it is provided and the importance of it in the context with your bookmaking business. In this context any support function provided by a related company needs to be considered.

• whether the ingredient is provided on an ‘arms length’ basis under a formal contractual arrangement, together with the payment of any fee or management charges
• whether the contractual arrangement is a genuine arrangement that is actually in operation. Are the appropriate fees or charges being paid for the service provided by you to any related company? Is the relationship no different than that which would exist between you and an independent third party?
• whether you hold any relevant gaming or betting licences and, if so, where are those licences held

(Note: the fact that any such licences are held cannot in itself determine whether you are carrying on business as a bookmaker in the UK. Similarly if you carry on the business of receiving or negotiating bets through remote communication media, but do not hold a remote operating licence under Part 5 of the Gambling Act 2005, it does not follow that you cannot be liable for GBD).

3. Notification and security

3.1 How do I notify HMRC of my business?

If you intend to conduct a general betting business, you must notify us. You can use a notification form BD75 GBD - notification to carry on a general betting business for this purpose. You can download a copy of this form from the HMRC website or phone the Excise and Customs helpline on Telephone: 0300 200 3700.

Make sure you send your notification to the National Registration Unit (NRU) at the address shown below, at least one week before you start your business.

National Registration Unit
HMRC
Portcullis House
21 India Street
Glasgow
G2 4PH

The NRU will give you a unique trader reference number.

Important Note: Failure to notify us at least 7 days before starting your business will attract a penalty.

3.2 Must I notify you if I am an on-course bookmaker?

Yes, even if you only take on-course bets. If you accept off-course bets, including bets from non-UK bookmakers, or through betting exchanges, you must notify the NRU in writing (see paragraph 3.1) within 7 days of accepting the bets. The NRU will arrange for the Cumbernauld Accounting Centre (CAT) to have returns sent to you so that you can account for the duty due on off-course bets.

3.3 What if I have more than 1 set of premises?

There should be only one notification for each legal entity, that is, sole proprietor, partnership or limited company. If for example, you are a sole proprietor and own three shops, the same notification will cover them all. If however, each shop is run by a separate legal entity, you will need to make three separate notifications.

3.4 Will I have to pay security?

We do not normally require security for duty. However, we may require security where we believe there is a risk to the revenue.

We will tell you if we require security and advise you on how you can provide it.

3.5 What trading changes must I tell you about?

You should tell the NRU about any changes which	For example
could affect your duty notification.	change to legal entity change of name or address changes to authorised signatories opening or closing a shop or ceasing to trade

3.6 What happens if I ‘Fail to Notify’?

You could be charged a penalty if you fail to notify us of your bookmaker’s business or of any business changes at the right time.

This new penalty regime applies when the obligation to notify arises on or after 1 April 2010.

For further information on the failure to notify penalty please visit the HMRC website.

4. About the duty

4.1 How do I calculate my net stake receipts?

4.1.1 Fixed-odds and totalisator bets

For fixed-odds bets and totalisator bets, your net stake receipts for each accounting period (see paragraph 6) is the difference between the total amounts of money:

• due to you for all bets made with you, or through you, in a duty accounting period and
• actually paid out to customers as winnings for bets made with you, or through you, in an accounting period regardless of when bets were made

4.1.2 Spread bets

Your net stake receipts for each accounting period are the difference between the:

• total amount of money due to you in respect of customer losses in a duty accounting period and
• total amount of money paid out by you in respect of customer winnings in a duty accounting period

4.1.3 Betting exchanges

Net stake receipts are not relevant to these traders. They calculate their duty liability on the charges they make (their commission etc) to their customers (see paragraph 9.1)

4.1.4 Winnings excluded

You cannot include uncollected or unnotified winnings in your net stake receipts. You can include however, amounts credited to your customer’s accounts in respect of winning bets, providing you have notified them of the payment and they are entitled to withdraw the amounts on demand.

4.2 What if I pay out more as winnings than I am due from bets made with me?

If you make a loss in an accounting period because you pay out more money for winning bets than you are due from bets made with you, then you will have no duty to pay.

4.3 Can I include promotional offers as winnings in my net stake receipts calculation?

You can only deduct winnings in respect of bets made with you when you calculate your net stake receipts. Stakes that are returned to customers can be treated as winnings. Only payments of money can be taken into account.

4.4 Can I carry over losses into the next accounting period?

Yes, you can carry over any loss for each class of bets (financial spread bets, or other bets) from one accounting period into the next. This only applies within each class of bets.

• example - (based on a bookmaker who takes fixed-odds and financial spread bets).During an accounting period your net stakes receipts calculation for fixed odds bets shows stakes of £100,000 less winnings of £120,000 = minus £20,000. Your duty liability in this accounting period is nil. If in the same accounting period the calculation for your spread bets shows stakes of £80,000 minus winnings of £60,000 = £20,000, you must account for the duty on those bets. You cannot offset them against your losses on the other class of bets

You can carry forward the loss of £20,000 from your fixed-odds bets into the next and following accounting periods, where relevant. This example is explained in section 14.

If your business ceases to trade and shows a loss in its final return, you cannot claim a repayment.

You must show the loss in box 4 on the relevant GBD return forms BD 211, BD211A or BD211B.

4.5 What about bad debts?

There is no duty relief for bad debts. You must include the full value of all bets made with you in your net stake receipts calculation, whether or not you received payment when you accepted the bets. A bet is liable to duty even if your customer does not pay you.

5. Returns and duty payment

5.1 How do I account for the duty?

You must account for duty using the appropriate return form, which covers:

• Form BD 211 - all bets - excluding spread bets and betting exchanges
• Form BD 211A - spread bets
• Form BD 211B - betting exchanges

You must fill in and send the return even if you have not carried on business during the accounting period.

5.2 Who supplies my returns?

Due to closure of the Greenock Accounting Centre, all accounting functions for GBD are now handled by the Cumbernauld Accounting Team (CAT). Returns are normally issued by CAT around 2 weeks before the end of the accounting period. If you lose, or do not receive your return, phone the Excise and Customs helpline on Telephone: 0300 200 3700 for a replacement immediately. Only the person named on the return can use it. You cannot get a return from another bookmaker and use that.

5.3 Who has to pay the duty?

• a bookmaker
• totalisator operator
• betting exchange

5.4 How do I pay the duty?

We accept payment by a range of methods but recommend that you use one of the following options:

• BACS Direct credit Internet/Telephone banking or CHAPS - you will need to supply your bank or building with the following details:- Sort Code: 08-32-00- Account number: 12000911- Account name: HMRC GACA- Payment amount- Your general betting reference number

(NOTE: Your reference number is made up of eight or nine digits which you should find at the top of your duty return. When providing your reference please show it in the format Betting/reference, for example Betting/12345678 - (this reference is only an example and should not be used to make a payment) * by post - If you are unable to pay by one of the options shown above, you should send your cheque with your duty return to the address below

Cheques should be made payable to ‘HM Revenue and Customs only’ followed by your general betting reference number.

If you are sending a payment to HMRC and do not have a pre-addressed HMRC envelope please send your payment to:

HMRC
Banking
St Mungo's Road
Cumbernauld
Glasgow
G70 5WY

Whatever payment method you use, you must make sure you have sufficient funds in your account to satisfy the payment.

For further information and additional options on paying GBD, please see the HMRC website.

If you ever make a payment without a return or remittance document, please make sure that you add your trader reference number for betting purposes and the reason for the payment.

5.5 When must I send in my return and duty payment?

You must send payment of duty together with your completed return form to CAT (see address at paragraph 5.4 above), no later than 15 days following the end of the accounting period. If the 15th day is a Saturday, Sunday or Bank Holiday, the return and payment must reach them by the previous working day.

Important note: You may be liable to a penalty if you do not send your completed return and payment by the ‘due date’.

5.6 What happens if I have made a mistake on a return?

You could be charged a penalty if don’t take reasonable care with your tax affairs.

We can charge a penalty if your return or other tax document is inaccurate and as a result you don’t pay enough duty, or if you don’t tell us a duty assessment we have sent to you is too low.

This new penalty regime applies to return periods commencing on or after 1 April 2009 where the return is due on or after 1 April 2010.

For further information on the inaccuracy penalty please see the HMRC website.

5.7 How can I avoid a penalty?

You can avoid a financial penalty by checking that you have given complete and accurate information in your return.

If you are aware you have made a mistake on your return, please tell us as soon as possible. We will be able to reduce the penalty, in many cases to zero.

You have the right to appeal if we impose such a penalty.

For further information on penalties please see the HMRC website.

For further information on appeals please see the HMRC website.

5.8 Who can HMRC collect unpaid duty from?

We will normally pursue the bookmaker responsible for the business, but can also recover the unpaid duty from:

• holders of a bookmaker’s general betting operating licence
• companies and their directors and
• persons responsible for management of the business or premises at which the bets were made

If you fail to pay any duty due from you, we may also apply to the Gambling Commission for a review of your general betting operating licence.

6. Accounting periods

6.1 What is an accounting period?

It is a set period, normally a calendar month, used to establish how much duty a bookmaker must pay on his net stake receipts for that period.

If your commercial accounting periods are based on non-standard months, for example ending on the last Saturday of each month, you can ask the CAT to vary the period covered by the return to match your commercial accounting periods. See paragraph 6.3 below on how to do this?

6.2 What conditions apply for non-standard monthly accounting periods?

Non-standard monthly accounting periods are available to all bookmakers. If you decide to apply, you must give us at least 28 days written notice before the first period is due to start, which must specify the:

• day your first accounting period begins
• day your 12th period ends and
• dates of your 12 consecutive periods, each:
• not less than 27 days, but
• not more than 35 days
• 12th period must not end later than 53 weeks after the beginning of the first period

If you want to continue for another 12 periods you must write to us again at least 28 days before the end of your 12th period.

6.3 Who can use extended accounting periods?

You are entitled to 3 calendar month accounting periods provided that:

• you give us written notice:
• at least 28 days, but not more than 90 days, before the first 3 month period is due to start
• specifying the first calendar month of that accounting period and *confirming that the 3 month consecutive periods will be your accounting periods for all qualifying bets
• you have not been convicted in the preceding 12 months of a general or pool betting duty offence in relation to fraudulent evasion or the making of false statements or false records
• you have furnished all returns required in the previous 12 months and paid any duty due, or have a time to pay agreement with us at the time of giving notice and you are up to date with your payments and
• the value of all bets made with you is no more than £660,000 in the 12 months before you notify us, and you meet the other conditions for extended accounting periods shown above

You will need to write to us again at least 28 days before the end of the fourth period if you continue to qualify for a further 12 months and wish to continue using 3 monthly accounting periods.

6.4 How do I notify HMRC if I qualify for non-standard monthly or extended accounting periods?

You should write to the CAT at:

HMRC
Banking
St Mungo's Road
Cumbernauld
Glasgow
G70 5WY

giving the first month of your new accounting period and include your general betting reference number.

Where appropriate, you must send a copy of your time to pay agreement.

6.5 When must I go back onto monthly accounting periods?

You will go back onto monthly accounting periods if:

• you are convicted of a GBD offence for fraudulent evasion or the making of false statements or false records
• you fail to send a return or pay duty by the due date
• your aggregate of amounts due to you for all classes of bets is above £825,000 in the 12 months before the end of any 3 month accounting period

7. Records

7.1 What records must I keep and for how long?

7.1.1 Off-course

Detailed rules covering your legal record keeping requirements are described in paragraph 7.3 below, but in general you will need to keep the following:

• a GBD account showing how you calculated your duty payment
• a daily record of bets made with you
• a daily record of bet-related winnings paid out
• copy betting slips
• any till rolls you produce
• your bank statements
• your cash and credit records and
• your annual accounts

You must normally keep your records for 3 years. You may destroy betting slips 6 months after the date when bets were made with you. However, in the case of winning bets, you must retain betting slips for a period of 6 months after the date you paid out the winnings.

7.2.1 On-course

If you are an on-course bookmaker and you accept off-course bets you must set up and maintain records as though you are an off-course bookmaker. You must keep a record of bets hedged, laid-off or otherwise placed with you by an off-course bookmaker, including their name and unique trader reference.

7.3 What if I keep records on computer?

If you use a computerised records system you must make sure that it meets the record keeping requirements set out in paragraph 7.3 below.

7.4 What is the law covering record keeping requirements?

The law provides that detailed rules covering record keeping requirements are published in this notice as ‘Directions’. These requirements are set out in the boxed paragraphs below for ease of identification.

The following rules have the force of law

Directions to bookmakers made under the Betting and Gaming Duties Act 1981, Schedule 1, paragraph 6 (1).

Off-Course Bets

Vouchers, letters and other papers, telephone

(1) For off-course bets made with you by:

• a bettor in person - you must keep a copy of the voucher (betting slips) you issue to that person.
• letter or another method involving the delivery or print out of paper bearing details of the bet - you must retain the letter or other paper
• telephone, or any other means not covered above - you must record the particulars on a voucher unless you maintain records that the Commissioners are satisfied achieve the same effect

(2) You must mark clearly and indelibly all vouchers (betting slips), letters and other papers that you use to record off-course bets with the:

• first unused number taken from a consecutive series and
• date and time the bet was made

• regardless of the system employed this information must be recorded at the time the bet is made, using mechanised means unless at the time the bet was made mechanised means were not available
  
  Daily Add List
  
  (3) You must keep a clear and indelible daily add list of:
  
  

• each amount of money, which falls due to you, for each class of off-course bet, made with or through you

Daily Add List Totals

(4) You must keep a clear and indelible record of daily add list totals of money due for each class of bet made with or through you:

• in a bound book made up of consecutively numbered pages and
• record this information in date order, by no later than noon on the day following the day on which the bets contained in the add list were made

Winning Off-Course Bets

Daily Add List

(5) For each class of bet, you must keep a clear and indelible daily add list for:

• each amount of money paid out in respect of winning off-course bets - which must be capable of reconciliation with the add lists of money due for off-course bets made with or through you and
• winnings paid to customer’s accounts - which must be capable of reconciliation with any associated business records you maintain including customer statements

(6) You must keep a clear and indelible record of daily add list totals of winnings paid out, including winnings notified as payments to customers accounts, for each class of bet made with you:

• in a bound book made up of consecutively numbered pages and
• record this information in date order, by no later than noon on the day following the day on which the bets contained on an add list were paid out or notified as payments to customers accounts

Alternative Form of Record Keeping

(7) You may instead maintain records in another form and manner not covered under the terms of directions (1) to (6) above, (for example by electronic means) that the Commissioners are satisfied achieves the same effect. If you use a till you must retain all till rolls.

Storage of Records and Documents

(8) Vouchers (betting slips), letters, papers, and other media:

• used to record winning off-course bets, must be stored in a readily accessible form and manner in daily batches for a period of - 6 months after the date when the winnings were paid out, or notified as payments to customer’s accounts
• all other vouchers (betting slips), letters papers and other media used to record off-course bets, must be stored in a readily accessible form and manner in daily batches for a period of - 6 months after the date when the bets were made

(9) All other records, documents and accounts:

• including trading and profit and loss accounts
• balance sheets and
• customer and bank statements

which you use in the course of your business, or which you use for the purpose of completing duty returns, must be stored in a readily accessible form and manner for 3 years.

GBD Account

(10) All off-course bookmakers must maintain an account to be known as the GBD account. This must consist of a summary:

• for each duty accounting period
• including information required to complete duty returns for each class of bets made

Directions made under Betting and Gaming Duties Act 1981, Schedule 1, paragraph 6(2)

Where you may keep your records

(11) You may keep any records, documents or accounts that you are required to keep under the terms of directions (1) to (10) above, at any of your places of business as a bookmaker in the UK, provided that they can be produced (in a readily comprehensible form) for inspection by HMRC at your principal place of business as a bookmaker.

Directions to bookmakers made under Betting and Gaming Duties Act 1981, Schedule 1, paragraph 9(2)

(12) Bets received from your agent

• you must keep and maintain a record of all bets received in any form, from any person acting as your agent, or any person whose authorisation as your agent stopped within the previous 2 months
• the record must include all bets received by any of your business premises that the Commissioners allow
• you must include all the information in this record under the terms of directions (1) to (11) above, as appropriate

7.5 Are there any other record keeping requirements for bookmakers?

Further information in respect of the maintenance and production of records and accounts by traders involved in any way with goods and services liable to Excise Duty, including GBD, is contained in Notice 206 Revenue traders accounts.

You must also keep additional records known as your ‘Excise Duty Account’ showing the amount of duty you are liable to pay within each accounting period. The box below reproduces these legal requirements.

Schedule 2 of The Revenue Traders (Accounts and Records) Regulations 1992

Particulars of the Excise Duty Account

1. The amount, before adjustment, of any duty payable by the revenue trader in each accounting period.

2. The amount of any adjustment in each accounting period.

3. The amount after any adjustment, of any duty payable by the revenue trader in each accounting period.

4. The amount, date and method of payment of any duty paid by the revenue trader.

8. Particular bets

8.1 How are hedged or laid-off bets accounted for?

These are bets one bookmaker makes with another. Each off-course bookmaker must include in his duty calculations all bets accepted and any winnings he pays out on those bets.

For example:

If bookmaker ‘A’ accepts a bet from a punter then	If bookmaker ‘A’ decides to hedge or lay-off some or all of the bet to
he must include the full stake due from, and any winnings paid out to, the punter in his duty calculation.	bookmaker ‘B’ then bookmaker ’B’ must include the hedged bet and any winnings he pays out in his duty calculation.

Any money that bookmaker ‘A’ lays-off or any winnings he receives from bookmaker ‘B’ for laid-off bets must not be included in his duty calculation.

You cannot reduce your net stake receipts by the stake you place with another bookmaker.

Remember, when you:

• make a hedged bet, you should exclude all details of the transaction from your net stake receipts calculation, and
• accept a hedged bet you should include all details of the transaction in your net stake receipts calculations

If you hedge with an on-course bookmaker, duty is only due on the original bet made with you. The amount received by the on-course bookmaker is a duty free on-course bet.

8.2 How do I account for duty on agency bets?

If you act as an agent for someone else, we will treat you as a bet-broker and you must account for duty as if the bet was made with you.

Calculate duty on your net stake receipts in an accounting period by:

• adding the value of all agency bets made through you with a bookmaker then
• deducting any bet-related winnings you paid out on behalf of the bookmaker

8.4 Do bet-brokers account for duty on commission?

GBD is not due on commissions earned by bet-brokers. Duty is calculated only from the value of the bets made and the winnings paid out. You must not deduct any commissions paid to you from stake money received or winnings paid out when you calculate your net stake receipts.

8.5 How do I account for duty when using a betting exchange?

GBD is charged on bets (other than on-course bets) made with a bookmaker in the United Kingdom. If you are a bookmaker, it makes no difference whether you take bets in a shop, over the phone, online, or through a betting exchange. Bets that you take, as a bookmaker, through a betting exchange are no different from other bets that you take, you must still include these bets in your duty calculation.

8.6 What type of pool betting is liable to GBD?

The only pool betting that is liable to GBD is when it involves horse racing and dog racing.

All other pool betting is liable to Pool Betting Duty (see Notice147 Pool Betting Duty).

8.7 What if I am an agent for Tote Direct?

If you accept pool bets as an agent for Tote Direct, you will:

• not be liable to pay duty on those bets
• the duty liability will fall to Tote Direct and
• you must not include any stakes and winnings related to Tote Direct bets in your duty calculations

8.8 How do I deal with ante-post bets?

These are bets you may accept well in advance of the event and where you give specified odds. You must include the value of the stake for ante-post bets in your net stake receipts calculation for the accounting period in which the bets were accepted.

For example:

If you accept a £50 bet in January for the Cheltenham Gold Cup, you must include:

• that £50 in you duty calculations for your January accounting period then
• any winnings paid out on this bet in your calculations for the accounting period when it was paid out

If paying out winnings on ante-post bets results in a loss within an accounting period, see ‘carry over of losses’ in paragraph 4.4.

8.9 Is duty due on void bets?

For the purpose of calculating GBD, a void bet is one that has been cancelled in accordance with a bookmaker’s previously agreed terms and conditions of betting.

You can treat any void bets as winnings paid out to your customers, provided that you included them in your net stake receipts when the bets were made and you return the stake to your customer.

We may need proof that a bet has become void. Simply failing to receive payment from your customer does not make a bet void.

8.10 What are free and discounted bets?

Free and discounted bets are promotional bet offers made by bookmakers to attract new customers or to stimulate existing customer betting.

8.11 Is duty chargeable on ‘free’ bets?

Yes, you must include the notional value of free bets in your net stake receipts calculation. For fixed odds bets the notional value is the stake the customer would have paid but for the offer. For example, if you offer a free £1 multiple bet to anyone visiting your betting shop, the notional value of the bet for duty purposes is £1. This applies, for example, to:

• free bet vouchers issued as part of a promotion
• free bets offered as an incentive once a qualifying bet has been made or a new account opened.

Account for any winnings relating to free bets in the same way as any other winnings.

8.12 What is the liability for discounted bets?

For fixed odds bets this is the full value the customer would have to pay for a bet without the benefit of the discount. When you calculate your net stakes receipts you must include the notional value of any bets that you offer discounts on. For example, if you offer a £1 treble for 90 pence the notional value of the stake is £1.

8.13 What if I take bets from overseas punters?

GBD is due on all bets made with a bookmaker in the UK, irrespective of the location of the punter when a bet is made. You must include money due from all bets made with you and all the winnings actually paid out by you in your net stake receipts calculation.

8.14 Is duty due on bets made by overseas punters via the Internet?

Bets placed over the Internet are no different from other bets. If you are a bookmaker or bet-broker in the UK who accepts bets over the Internet you must include the value of all stakes accepted and all winnings paid out when calculating your net stake receipts at the end of an accounting period.

8.15 Are bets liable to duty, when made by an overseas bookmaker with an on-course bookmaker?

Yes. Only bets made in the course of business by UK based off-course bookmakers with on-course bookmakers are not liable to duty.

8.16 What about bets made by an on-course bookmaker with an off-course bookmaker?

Bets made by on-course bookmakers with UK based off-course bookmakers are liable to duty. If you are an off-course bookmaker you must include the value of bets made with you by on-course bookmakers in your net stake receipts calculation.

8.17 How do I account for credit bets?

The duty liability for credit bets is calculated in the same way as your other bets. You must account for the value of stakes in the period the bet is made. You must also include the amount of any winnings in the period they are paid out or notified to customers. The fact that you do not receive payment of stake money when the bet is made does not affect the duty liability.

For example:

If your customer	and you	your duty calculation for July
phones on 4 July with a £50 bet (which loses), phones you on 10 July with a £50 bet (which loses), and phones you on 20 July with a £50 bet that wins at ‘evens’	notify him of his account balance on 30 July, but he does not settle his account until 4 August	must include the total amount of stakes due for his bets (£150) minus the total amount of winnings notified to him (£100).

But:

If you	your duty calculation for July
did not notify him of his account balance until 1 August, instead of 30 July	would include the total amount of stakes due for his bets (£150) but would not deduct any winnings because none were paid out, or notified, in that period.

9. Betting exchanges

9.1 What is the duty charged on?

GBD is due on any amount that a betting exchange charges to other parties who use its facilities to make bets, for example:

• commission charges
• administration fees
• deductions from winnings, etc

Betting exchanges are liable to GBD at 15%, on the charges they make in each accounting period in relation to bets that are determined in that period.

9.2 What if my commission is not paid?

Duty is due on the amount charged. There is no relief from the duty liability if that amount is subsequently unpaid.

9.3 Is my return different from a bookmaker’s return?

Yes. The information that we require from a betting exchange is different from a bookmaker. You should write to the Cumbernauld Accounting Team (CAT) telling them that you are a betting exchange. They will make sure that you get the correct version of the return form (BD211B). Their address is:

HMRC
Banking
St Mungo's Road
Cumbernauld
Glasgow
G70 5WY

9.4 What information will I have to put on my return?

You must provide information for each accounting period on the following:

• the total amount of the bets made through your betting exchange
• the total amount of winnings paid out on those bets
• the total amount you receive in charges, (commission etc - see paragraph 9.1 above and
• the duty due from you on those charges

9.5 Are there any special record-keeping requirements?

We will not normally ask you to maintain records that you would not keep for commercial reasons. You must however keep sufficient records that will allow you to:

• provide the information set out in paragraph 9.4, for each accounting period
• calculate the duty you must pay and
• complete your return

For further information about record keeping requirements, see paragraph 7.3.

9.6 If I make deductions from charges I receive, will that reduce my duty liability?

No.

10. Spread betting

10.1 What is spread betting?

Spread betting involves betting on the outcome of fluctuations of an index offered by a licensed bookmaker. Typically, a bookmaker will quote a ‘spread’ covering a range from an index.

The bookmaker believes the closing position of the index will fall within this spread and punters are invited to bet whether the index will close at a higher, or lower, position than the quoted spread.

Spread bets can be based on financial indexes, such as fluctuations in the value of stock markets, or non-financial indexes such as the number of runs scored in a cricket match or goals scored in a football match.

Punters can choose to bet that the fluctuation of an index will be above the quoted spread (a ‘buy’ bet) or that it will be below the quoted spread (a ‘sell’ bet).

A punter’s winnings or losses will depend on how right or wrong they are in predicting the fluctuation of the index.

For example, a bookmaker in inviting spread bets based on fluctuations of the FTSE 100 share index might offer a spread of 5960 - 5970 on the closing value of the index at the year-end.

A punter who believes the markets will close at a higher value than 5970 might choose to buy against this spread at £100 per point.

If the markets closed at 5995 points the punter will win:

(5995 - 5970) x 100 = £2,500.

Conversely, if the markets closed below 5970 the same punter would lose £100 for each point below 5970.

10.2 How do spread bet bookmakers calculate their duty liability?

The amount of duty you must pay, as a spread bet bookmaker, will depend on your net stake receipts for each accounting period for each class of spread bet.

Your net stake receipts for each class of bets will be the total amount that falls due to you in respect of customer losses in an accounting period less the amount you actually paid out as winnings for the same class of bets in the same accounting period. This basis of calculating net stake receipts differs from the method used for fixed odds and totalisator betting because spread bet bookmakers do not know how much is being risked when a bet is made.

You can include as winnings amounts credited to your customers accounts in respect of winning bets when they have been notified of the payment and they are entitled to withdraw the amounts on demand. Remember that you must include bets that your customers fail to honour in the ‘customers losses’ side of the calculation. There is no relief from GBD for bad debts.

If you accept financial spread bets and other spread bets, you will need to carry out separate net stake receipts calculations for these two classes of bets. Different duty rates apply to each class and you must enter them separately onto your duty return (form BD211A).

10.3 What spread bets qualify for the financial spread bet duty rate?

In broad terms a financial spread bet involves making a bet with a licensed bookmaker on the movement of an established financial index such as the FTSE 100 share index. Generally, bets on the financial matters listed in the Financial Services and Markets Act 2000 will be treated as financial spread bets. However, we have the power to specify what spread bets are financial spread bets for the purpose of GBD.

10.4 Must spread bookmakers account for duty on free bets?

Yes, you must include the notional value of losing free bets made with you and which are determined in the same accounting period in your net stake receipts calculation.

The notional value for duty purposes is the amount that a bettor would have been required to pay for a losing bet but for the offer.

11. Fixed-Odds Betting Terminals (FOBTs)

11.1 What is the duty liability of an FOBT?

These are machines that provide fixed-odds betting in the form of casino games, the most popular being roulette. Although these are found in betting shops they are defined as gaming machines, and are liable to Amusement Machine Licence Duty (AMLD).

11.2 Where can I get more information about Amusement Machine Licence Duty?

You can download a copy of Notice 454 AMLD, or form L222 Application for AMLD from the HMRC websiteor contact the Excise and Customs Helpline, Telephone: 0300 200 3700.

11.3 What if I’m not registered for VAT?

Businesses not registered for VAT but operating gaming machines, should consider whether they now have a liability to register. You can obtain further information, which is contained in Notice 700/1 Should I be registered for VAT?. Again, visit out website or contact the Excise and Customs Helpline.

12. Law

12.1 What is the law on GBD?

The principle law on GBD is contained in sections 1 to 5, 9, 12, 27 to 31 and Schedule 1 of the Betting and Gaming Duties Act 1981 (BGDA) as amended.

Secondary legislation is contained in the GBD Regulations 2001, amended by the GBD Regulations 2003 and 2004.

Spread betting is also subject to the regulatory requirements imposed by the Financial Services and Markets Act 2000.

Betting in the UK is also subject to social law, principally the Gambling Act 2005 and, in Northern Ireland, the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985.

12.2 What legal powers do HMRC officers have?

Our officers have a responsibility, both to the Exchequer and to compliant taxpayers, to make sure that duty is accounted for correctly. We will do this by occasional visits to your premises to look at your records, your accounting systems and your business, or by contacting you for additional information. One of our officers will normally make an appointment to visit you, although, we may also make unannounced visits to make sure that you are complying with the duty requirements. There are also a number of provisions in law that are designed to enable us to assure the duty more effectively. These include the power to:

• issue an assessment where duty has been underdeclared or a return has not been submitted
• require security for the duty to protect the revenue
• enter any premises used for the purposes of a betting business
• remain on those premises so long as our officer has reasonable cause to believe that the premises may be used for the purposes of carrying on the business
• direct what records and accounts are to be kept
• inspect any books, records and accounts directed to be kept and any other books, records, accounts or other documents which relate or appear to relate to the business, including business bank accounts and annual accounts
• take copies of any books, records, accounts or other documents relating to the GBD and to require you to furnish such information and assistance as our officer may require and
• enter free of charge any track or any place used in connection with on-course betting. You must give our officer any help or information requested

12.3 What provisions may attract civil penalties?

Civil penalties may be applied to a range of provisions under section 9 of the Finance Act 1994. These include failure to render duty returns, failure to pay duty due, and failure to notify for betting duty. Notice 209 Civil penalties: fixed, geared and daily gives more information on this subject.

13. Review and appeals

13.1 Can I appeal against decisions made by HMRC?

Yes, you have the right to ask us for a review, or appeal directly to an independent tax tribunal, on certain decisions we make about your business. A review will be handled by an HMRC officer not previously involved in the matter. If you opt for a review you can still appeal to the tribunal after the review has finished.

If however you would prefer to have an independent tax tribunal hear your case, you must write directly to the Tribunals Service within 30 days of the date of this letter (see paragraph 13.4).

13.2 Is there a time limit to ask for a review or an appeal?

Yes. If you want us to review a decision, you must write to the person who issued the decision letter within 30 days from the date of that letter. We will complete our review within 45 days, unless we agree another time with you. We will not take any action to collect the disputed tax while the review of the decision is being carried out.

13.3 What must I include in my appeal letter?

Your written request should set out clearly the full details of your case, the reasons why you disagree with us and provide any supporting documentation. You should also state what result you expect from our review.

13.4 Where can I get more information?

You can find further information about appeals and reviews, or download a copy of our Factsheet HMRC1 HM Revenue and Customs decisions - what to do if you disagree, by clicking on the link provided. You can also find out more about tribunals on the Tribunals Service website or you can phone them on Telephone: 0845 223 8080.

14. Carry forward of losses

See paragraph 4.4.

Carry forward of losses
	Accounting period 1(September)		Accounting period 2(October)
	Other bets (15% rate)	Spread bets (3% rate)	Other bets (15% rate)	Spread bets (3% rate)
Aggregate of amounts due to you for bets made in the period	£100,000	£80,000	£115,000	£93,000
Aggregate of amounts paid as winnings by you in the period	£120,000	£60,000	£100,000	£88,000
Amount of net stake receipts for bets	-£20,000 (minus balance)	£20,000	£15,000	£5,000
Less carry forward of losses from previous accounting period	Nil	Nil	-£15,000 (part carried forward from period 1)	Nil
Balance due for duty calculation	-£20,000	£20,000	Nil	£5,000
Duty	Nil	£600	Nil	£150
Total payable	£600	£150

Continuation …

Carry forward of losses
	Accounting period 3(November)
	Other bets (15% rate)	Spread bets (3% rate)
Aggregate of amounts due to you for bets made in the period	£150,000	£120,000
Aggregate of amounts paid as winnings by you in the period	£90,000	£90,000
Amount of net stake receipts for bets	£60,000	£30,000
Less carry forward of losses from previous accounting period	-£5,000 (balance carried forward from period 1)	Nil
Balance due for duty calculation	£55,000	£30,000
Duty due	£8,250	£900
Total payable	£9,150

Note: There is no scope for repayments of duty, or credits due to a loss.

15. Glossary

Term	Description
Accounting period	A calendar month, (unless you have agreed for non-standard accounting periods).
Agent	A person who has authority and consents to act on behalf of another person.
Ante-post bets	Bets accepted in advance of the event, with specified odds.
BACS	Bankers Automated Clearing System.
BGDA	The Betting and Gaming Duties Act 1981.
BGLAO	The Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985.
Bet	Although not defined in law, each party to the bet must stand to win or lose something dependent on the outcome of the issue in question.
Bet broker	Anyone providing facilities that allow people to bet against each other, except betting exchanges.
Bet-taker	Accepts the bet through facilities provided by a ‘bet-broker’ (other than a betting exchange).
Bettor (or punter)	Person making the bet.
Bookmaker	Any person who receives or negotiates bets or conducts pool-betting operations (as agent, or principal, or occasionally, or regularly), by way of business, unless operating or employed in operating a totalisator. See section 12 of BGDA.
CAT	Cumbernauld Accounting Team, HMRC Banking, St Mungo’s Road, Cumbernauld, Glasgow G70 5WY. This office handles all General Betting Duty returns and payments.
CHAPS	Clearing House Automated Payment System.
Duty Return	Forms BD211, BD211A and BD211B are used to account for duty due in each accounting period. Supplied by CAT.
Fixed odds bets	Where a person making the bet knows the amount they can win. A bet at ‘starting prices’ or at ‘totalisator odds’ is also classified in law as a bet at fixed odds.
FOBT	Fixed-Odds Betting Terminal.
Free or discounted bets	Promotional bet offers made by bookmakers to attract new and increased customer betting.
General Betting Duty	Excise Duty charged at 15% on bets made with a UK bookmaker (but see spread bets).
NRU	National Registration Unit, Betting and Gaming, HM Revenue and Customs, Portcullis House, 21 India Street, Glasgow, G2 4PH.
Hedged bets	A bet made by one bookmaker, usually with another, to reduce his exposure to risk as a consequence of the particular outcome of an event.
Net stake receipts	A bookmaker’s gross profit calculated from the total amount of money received from bets, less winnings paid out within an accounting period.
Off-course bets	All bets other than on-course bets.
On-course bets	Bets made at a horse or dog race meeting, where both the person making the bet and the bookmaker or totalisator operator accepting the bet are present at the meeting. Hedged bets made by UK off-course bookmakers, with on-course bookmakers present at the meeting.
Punter	A term to describe a bettor.
Spread betting	Betting on the outcome of fluctuations of an ‘index’. Financial spread bets at 3% and other spread bets at 10% duty rate (see paragraph 1.4 and section 10). Spread bets constitute a contract under the Financial Services and Markets Act 2000.
Stake	The sum falling due when a bet is made, which represents the amount that will be lost if the bet is unsuccessful.
Totalisator	A totalisator operates pool betting in the UK on horse or greyhound racing (usually a mechanised system).

How we use your information

HMRC is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

• check the accuracy of information
• prevent or detect crime
• protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HMRC unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue and Customs
Gambling Duties Team
Excise, Customs, Stamps and Money
3WRalli Quays
3 Stanley Street
Salford
M60 9LA

Please note this address is not for general enquiries.

Complaints

If you are unhappy with the way we have handled your affairs (because of delays or mistakes, for example) please tell the person or office you have been dealing with. If they are unable to sort things out, ask for your case to be referred to the complaints team. For more information about our complaints procedures, go to www.hmrc.gov.uk and under ‘quick links’ select ‘Complaints’.