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National Audit Office report: HM Customs and Excise: Revenue From Gambling Duties

HM Customs and Excise: Revenue From Gambling Duties

"The report shows that H M Customs and Excise are doing much good work to collect the correct amount of gambling duties, but there are still risks to that revenue from illegal bookmakers and operators using amusement machines without obtaining licences. Closer working with other government agencies involved with the industry can help to tackle these risks."

"The report shows that H M Customs and Excise are doing much good work to collect the correct amount of gambling duties, but there are still risks to that revenue from illegal bookmakers and operators using amusement machines without obtaining licences. Closer working with other government agencies involved with the industry can help to tackle these risks."

Sir John

 

Sir John Bourn, head of the National Audit Office, today reported to Parliament on the work of HM Customs and Excise in collecting gambling duties. Sir John reported that the Department collected £1,530 million in gambling duties in 1998-99, some 22 per cent of the £7 billion spent on gambling in the United Kingdom. The report found that the highest risks to revenue from gambling duties are illegal bookmakers and operators using amusement machines without obtaining licences.

The main findings of the NAO report were as follows:

  • the Department become aware of a new trader undertaking betting and gaming activities mainly through the local licensing authorities. As there are over 1,000 licensing authorities, there is a risk that they may be uncertain to which of the Department’s 13 Collections (regional Executive Units) they should report details of new traders. A licensing authority may not always inform a collection of all new traders and the situation may not be detected by the collection;
  • for amusement machines, however, there is no statutory requirement for licensing authorities to notify the Department of traders eligible to pay the licence duties. Licences can be purchased by any of 850 suppliers or 60,000 small operators and with over 200,000 machines there is a risk that the Department may not be aware of all permitted sites or operators, and consequently some duty may not be collected; and
  • the efficiency and effectiveness with which the Department’s audit of traders is carried out can be affected by the way their collections organise their staff. There are two main approaches which collections use: “centralised” or “dispersed” teams of officers. Our analysis indicated that the effectiveness of the centralised approach is significantly greater in terms of value of the errors detected per officer year at almost £91,000 compared to £67,000.

Sir John recommends that the Department should:

  • improve their procedures with respect to gaining information from licensing authorities on new traders;
  • look to use suppliers’ records to check that amusement machines licences have been purchased;
  • consider whether collections have organised their staff resources in the most efficient way to carry out audit work on betting and gaming duties;
  • look to work more closely with other government agencies which also deal with the industry such as the Gaming Board and the Inland Revenue. Sharing information could lead, for example, to improved intelligence on illegal traders, and there is scope for more joint investigative work; and
  • ensure that sufficient attention is given to individual duties within each financial year. Because the Department’s risk assessments apply across all traders paying excise duties, particular duties such as betting and gaming may receive little attention if the traders paying these duties have not been selected for review.

 

Publication details:

ISBN: 0105567299 [Buy a hard copy of this report from TSO]

HC: 352 1999-2000

Published date: March 30, 2000