§ Lord Killearnasked Her Majesty's Government:
Why persons who win bets on horse-races are taxed not only on the winnings but also on the stake money; whether they will consider taxing stakes compulsorily (rather than optionally, as at present), whether the bet is won or lost; and whether, if this were done, the rate of tax on betting could be reduced, and stake money could be calculated and charged gross of tax in the first instance.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)The betting duty is already charged, without option, at 8 per cent. of the gross amount paid or debited when an off-course bet is made. To recover the duty bookmakers normally offer clients the alternatives of paying an additional amount when making a bet (the whole being dutiable) or of having a deduction made from total winnings, including returned stake money. The exact arrangements for recovery of the duty by bookmakers are for them and their clients.