§ Part II of the Finance Act, 1920, which regulates duties on betting and on certificates required in respect of bookmakers' business and premises, shall be amended so as to provide that where any bookmaker shall show, to the satisfaction of the Commissioners, that the original stake on which he has paid duty under Section fifteen (a) of the Finance Act, 1926, has not been paid to him, and that he is unable, after taking all reasonable steps, to obtain payment of it, the amount of the duty charged upon such stake shall be refunded to the bookmaker by the Commissioners.—[Mr. Womersley.]
§ Brought up, and read the First time.
§ Mr. WOMERSLEYI beg to move, "That the Clause be read a Second time."
I am hoping that the Chancellor of the Exchequer will be able to accept this mild little amendment of the Finance Act, 1926, because it removes one of the anomalies in the Betting Duty law which has really been causing a good deal of annoyance to certain people who are affected by this form of tax. The credit bookmakers have to pay on their turnover as entered in their books. If they are so unfortunate as not to receive the tax from the people who make these credit bets with them, they not only lose their money which forms the stake but also the money that they pay to the Treasury in the form of tax. It does appear to me that it is quite unfair to ask for payment of the duty on money that has never been received. In the case of an ordinary Income Tax return by a trader, he is allowed to deduct from his profits bar debts which can be proved to be really bad and irrecoverable, and all that we are asking for in this Clause is that the credit bookmaker shall be placed in the same position in which the ordinary trader is in regard to Income Tax. To my mind, to ask these people to pay the tax whether they receive the money or not is more than we ought to ask of them.
A test case was taken a short time ago to sec if it were possible to recover from 1287 a defaulting client the amount of the tax which had been paid in respect of his bets. As is well known to all Members of the House, if an attempt is made to recover a debt that is in the form of a stake on a horse race or any other form of betting, all that the defaulter has to do is to plead the gaming laws, and the bookmaker cannot recover. It was felt that it would be wise to take a test case with regard to the question of the recovery of the amount paid in tax, and such a case was recently tried at the Westminster County Court, but the bookmaker was not able to recover. Therefore, I ask the Chancellor of the Exchequer to give this matter his very careful consideration, and I hope that he will be able to grant a concession which I think is only right and just.
§ Mr. CHURCHILLNo one can deny that there is a plausible case in regard to this matter, more especially when it takes the form of asking that the tax should be recovered which has been paid on bets in the case of which the backer has defaulted. Nevertheless, the position, after full consideration, was deliberately taken up, when the tax was originally imposed, that these bad debts in gambling are a necessary and inevitable part of the circumstances with which persons following the profession of a bookmaker are confronted—that they are an essential part of the risks attaching to the profession, and are capable of being taken into consideration by a bookmaker in the general level of the odds which he gives to his clients and the special rules and regulations which form a part of the conduct of his business; and it was considered that it would be far better for us to leave it to the bookmaker to make his charges to his clients for services rendered in facilitating their wagering acts, and to allow therein a proportion for bad debts, than for the State to come along afterwards and investigate all these exceedingly difficult questions as to whether a debt was a bad debt or not. My hon. Friend, if I may call him so, the Member for Dundee (Mr. Scrymgeour) would say that all gambling debts were bad debts in the worst sense of the word, but all these processes would have to be followed out on behalf of the State lap by lap along the course—if I may use what seems in the circumstances to be an appropriate 1288 expression—and would involve even greater labour and difficulty than is involved in the enforcement of the tax at the present time.
If we are going to consider at all the Betting Duty and its incidence, I might say—without committing myself in any degree, or making any promise respecting the future—that, as I indicated at an earlier stage in our discussions, I do not close my eyes to a review of the position; but, if we are going to make any such review, I am sure it would be much better to make a general survey rather than deal now with this particular point, which, although a very plausible case can be made on it, is not a point of real substance, does not lead to real embarrassment of the bookmaker, and would only lead the State into further labour without giving relief where relief is most urgently needed.
§ Mr. RYEWith very great respect to the Chancellor of the Exchequer, I cannot see why this distinction should be made between the bookmaker and the ordinary trader. If an ordinary trader makes a bad debt, he is entitled to deduct it for the purpose of arriving at the income on which he pays Income Tax, and, if a bookmaker has failed to recover a debt, I do not see why he should be placed in any different position from the ordinary trader.
§ Mr. CHURCHILLHe can deduct bad debts in arriving at his income for the purposes of Income Tax, but he cannot deduct them for the purpose of the operation of this special Betting Duty.
§ Mr. RYEI understood that the object of this proposed new Clause was to enable the bookmaker to deduct for the purpose of Income Tax——
§ Mr. WOMERSLEYPerhaps I may explain to the hon. Member, and to other hon. Members, that this proposed new Clause deals with the Betting Duty, and not with Income Tax. The bookmaker has to pay two taxes—he has to pay Income Tax in addition to the Betting Duty. I only used the Income Tax as an illustration.
§ Mr. RADFORDI am very disappointed at the reply of the Chancellor of the Exchequer to the hon. Member for 1289 Grimsby (Mr. Womersley). We may hold different views with regard to betting and with regard to this Duty, but it seems to me to be entirely inequitable that bookmakers should be taxed upon something which is not their turnover, but a sort of fictitious transaction in which the man who made the bet did not intend to honour, or, at any rate, did not honour, his obligation. Common equity demands that in such a case the bookmaker should be allowed to deduct from his turnover the entry of what proved not to have been a genuine bet so far as he was concerned. I would ask the right hon. Gentleman to give this matter further consideration, because, in such a case as I have mentioned, it is just as much a loss as a bad debt would be to a person engaged in trade. The right hon. Gentleman said just now that he was confident that bookmakers, in making their books, took into account the possibility that there would be bad debts, but so does a trader. He calculates that one of his trading expenses will be bad debts, but that is no argument against allowing him to charge bad debts in his accounts when they are incurred.
§ Question, "That the Clause be read a Second time," put, and negatived.