Before 2000, tax-free online and offshore betting was reducing the revenues of high street betting shops and the tax receipts of the Department of Customs & Excise.
The Department of Customs & Excise invited tenders to explore whether to reform tax from bets placed in the UK.
Having won the tender, the team from The University of Nottingham Business School recommended moving away from a regime of tax on individual bets to a regime of tax on the gambling organisation’s gross profits.
The Department of Customs & Excise accepted the Business School’s recommendations. In 2000 the law was changed, protecting loss of tax revenue and allowing UK betting shops to compete on a level playing field.
Customs & Excise
The University of Nottingham Business School is one of Europe’s leading research-led business schools. As an endorsement of the international quality of its work, the School was awarded a Grade 5 in the 2001 Research Assessment Exercise. The School offers expertise in a broad range of areas, including entrepreneurship, management buy-outs, corporate social responsibility, business ethics, corporate governance, risk management, financial services, strategy, international marketing and operations management.
Many of the Business School’s consultants have worked in industry, and offer highly specific expertise. Professor David Paton is a Professor of Industrial Economics and a member of The University of Nottingham Tax Research Institute. In 1999, his expertise in tax was called upon by the government for a specific purpose. The advent of online betting - which being offshore was not subject to tax in the same way as high street betting - was reducing gambling tax revenue for the government as well as the income of UK high street betting shops.
The Department of Customs & Excise invited tenders to investigate whether to remove tax or change the way in which tax was paid by high street betting shops. The Nottingham team - led by Professor David Paton, Professor Donald Siegel and Professor Leighton Vaughan Williams of Nottingham Trent University - won the tender. Their report, titled “Economic Analysis for the Options for Taxation of Betting”, recommended a shift from tax on bets to tax on gross profits. “This would protect tax revenues for the government, enable high street betting shops to operate on a level playing field, and reduce the tax burden on UK gamblers,” stated Professor Paton. In 2002, the gambling tax law was reformed.
As well as operating as part of a team, there are many occasions when Professor Paton is called to provide specific expertise as an individual consultant. In 2004, a story in the media revealed that teenagers had the right to abortion without their parents being informed by health authorities. Most parents had no idea this was the case.
Sue Axon, a mother, decided to take the Department of Health to court in order to challenge teenagers’ right to confidential access to abortion.
Such an emotive subject, with profound ethical considerations, naturally requires the highest levels of expertise. Thanks to his published work in titles including The Economic Journal and The Journal of Health Economics, Professor Paton was called as an independent expert witness by Sue Axon’s law firm, Ormerods of Croydon.
By conducting an intensive literature search, reviewing arguments and evidence from the US as well as utilising his own research, Professor Paton produced a 200 page report to be presented in court during the 2005 Judicial Review. This report, together with its follow-up, were central to the arguments within the Judicial Review. “It was a high profile case which received a lot of media attention. My research was under a sharp spotlight so the need to make it as thorough as possible was absolutely paramount,” stated Professor Paton.