UK National Lottery Provider Camelot Using Loophole to Pay Less Taxes
Posted on: October 24, 2013, 05:30h.
Last updated on: October 23, 2013, 09:43h.
As the National Lottery providers for Great Britain, Camelot earned enough from the British public to pay a whopping load of taxes back into the country. But UK newspaper The Daily Mail has revealed that Camelot has a different view on the matter.
The Canadian-owned firm has been accused of exploiting a tax loophole, which the taxman is aware of but has never shut down (probably because the taxman created it in the first place), in order to avoid paying at least £10 million ($16,130,000) in corporate taxes in just a matter of weeks since the cost of a ticket for the national draw doubled.
Corporate Tax Loophole
Camelot is reported to have taken out high-interest loans from its parent company, using the Channel Islands Stock Exchange, and used the enormous interest payments to essentially reduce their own profits, meaning they paid less tax while the company as a whole still pocketed the money in a tax haven.
The loans are said to have amounted to £172.6 million ($278,405,000), which then accrued £38.7 million ($62,423,000) in interest.
This legal tactic is reported to have saved the company at least £10 million in taxes since just April 2010.
In fact, according to Corporate Watch and The Independent, at least 30 other organizations are said to be using such a method to reduce and avoid tax payments in the UK, which could amount all the way up to £500 ($806.5) million in lost taxes each year.
These figures conflict quite significantly with the government’s estimations of £200 ($322.6) million annually, when they revealed their awareness of the loophole last year. Apparently the powers-that-be aren’t quite as miffed about it all as some people think they should be, however.
Who’s Being Naive, Exactly?
“I find it extraordinary that [Her Majesty’s Revenue and Customs] HMRC could be so naïve as to send out a consultation document on closing a tax loophole to a group of vested interests, including some of the very people who benefit, or whose clients benefit, from it,” explained Chair of the Commons Public Accounts Committee Margaret Hodge to The Independent newspaper, also stating that she will ensure that the HMRC is given a tough ride over the issue.
We’re not sure exactly why a public figure thinks tax loopholes are created to begin with, but let’s just say everyone is fully aware of their purpose, except, apparently, puffy politicians trying to act surprised about them to their constituents.
And while Camelot has stated that “their analysis of our figures is inaccurate,” they have made no effort to deny using the loophole to decrease their tax bills.
“Camelot complies fully with all UK regulatory, tax and legal requirements – and is a very significant UK taxpayer,” said a Camelot spokesman, basically highlighting the fact that the law is allowing them to dodge some of their tax responsibilities.
“In fact, in the period reported by The Independent, Camelot paid UK taxes well in excess of £1.5 billion,” the spokesman added. Sounds like a government lottery win to us.
To help justify their actions, Camelot has been scrambling towards their good deeds as they explain that they have increased National Lottery sales by over 50 percent in the last decade and that they now raise over £35 million per week for National Lottery Good Causes.
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