Rachel Reeves was warned last night not to hit betting and holiday firms with a “tax on fun” at the Budget, as businesses threatened mass closures and price rises.
If gambling taxes are hiked as rumoured, Betfred’s 1,300 High Street shops could close along with 7,000 jobs, the bookmaker has warned.
Meanwhile, tour operators say holiday costs will rise if they are taxed more next month, as the Chancellor faces a potential £30 billion financial black hole ahead of her first Budget.
Betfred Warns of Total Retail Closure
Warrington-based bookmaker Betfred says possible rises in duty on sports betting from 15 to 30 per cent and on online slots from 20 to 50 per cent would force it to close all of its shops.
Betfred is owned by Fred and Peter Done, whose family is the UK’s second-biggest taxpayer.
Chief executive Joanne Whittaker said: “The most frightening element is we’re going to lose the whole retail business. I’m not scaremongering.”
She warned that tax revenue would actually drop and cause more black market betting, adding: “The safest place for anyone to have a bet is with a UK-regulated bookmaker.”
“We don’t need people looking down on the people that choose to have a bet,” Whittaker added, defending punters’ right to gamble responsibly.
7,000 Jobs at Risk
The potential closure of Betfred’s entire High Street estate would put 7,000 jobs at risk across the UK.
The bookmaker’s 1,300 shops are concentrated in towns and cities across Britain, meaning closures would hit local communities hard.
Many betting shops employ staff in areas where job opportunities are already limited, making the threat particularly serious for local economies.
Holiday Firms Warn Prices Will Rise
Meanwhile, major tour operators Tui and Jet2 have warned that prices will rise if their taxes go up in the Budget.
Tui UK managing director Neil Swanson said: “We won’t be able to absorb the extra costs. We’ll need to pass some or all of it on. That’s going to price some people out of the market.”
Jet2 said “Middle England” cannot be used as a “cash cow” to plug the Treasury’s finances.
The warnings suggest millions of British holidaymakers could face higher prices for their annual breaks if Reeves proceeds with tax rises on the travel industry.
£30 Billion Black Hole
The Chancellor is grappling with a potential £30 billion financial black hole as she prepares her first Budget next month.
Reeves has warned of “tough decisions” ahead and has refused to rule out tax rises across multiple sectors to plug the gap in public finances.
However, business leaders are increasingly vocal in warning that some tax rises could prove counterproductive by damaging growth and reducing overall revenue.
Black Market Betting Warning
Betfred’s Whittaker warned that driving betting firms out of business through punitive taxation would simply push gambling into unregulated black markets.
“The safest place for anyone to have a bet is with a UK-regulated bookmaker,” she emphasised, highlighting the consumer protections and responsible gambling measures that licensed operators must provide.
Unregulated betting operations do not offer the same safeguards for problem gamblers or guarantees that winnings will be paid.
Shadow Minister: “Kill Off” Tax Plans
Shadow Business Secretary Andrew Griffith said last night: “Rachel Reeves must immediately kill off any suggestion of taxing things that make life bearable like a week in the sun or the occasional flutter.
His comments reflect Conservative opposition to what they characterise as Labour’s “tax on fun” approach to filling the fiscal gap.
The phrase “tax on fun” is designed to frame any gambling or holiday tax rises as attacks on ordinary people’s leisure activities.
Second-Biggest Taxpayers
The Done family, which owns Betfred, is the UK’s second-biggest taxpayer, meaning the Treasury already benefits significantly from the bookmaker’s success.
This status gives Betfred’s warnings additional weight, as the closure of the business would represent a substantial loss to the Exchequer beyond just betting duty.
Doubling Sports Betting Duty
The rumoured increase in sports betting duty from 15 to 30 per cent represents a doubling of the current rate.
Such a dramatic rise would fundamentally change the economics of retail betting shops, which already operate on tight margins.
Industry insiders argue that a 30 per cent duty rate would make it virtually impossible to run profitable High Street betting operations.
Online Slots Tax Could Hit 50%
The potential rise in online slots duty from 20 to 50 per cent would be even more dramatic, effectively taking half of operators’ revenue.
Online gambling has boomed in recent years, and the Treasury may see it as a lucrative source of additional revenue.
However, operators warn that such high rates would drive customers to offshore operators not subject to UK taxation.
Middle England “Cash Cow” Warning
Jet2’s warning about Middle England being used as a “cash cow” reflects tour operators’ concerns that the Budget will disproportionately hit ordinary working families.
Package holidays have long been seen as an affordable luxury for middle-income families, and price rises could put them out of reach for many.
The travel industry has already faced significant challenges in recent years due to COVID-19 and increased costs.
Absorbing Costs “Impossible”
Tui’s statement that it cannot absorb additional tax costs reflects the competitive nature of the holiday market.
Tour operators work on relatively thin margins, with fierce competition keeping prices down.
Any tax increase would therefore have to be passed on to customers to maintain viability.
Pricing People Out of Holidays
Swanson’s warning that tax rises would “price some people out of the market” highlights the potential social impact.
For many families, an annual package holiday represents their only significant break from work and daily pressures.
Pricing lower and middle-income families out of holidays could have wider implications for wellbeing and quality of life.
Balancing Act for Reeves
The Chancellor faces a difficult balancing act between raising revenue and avoiding damage to businesses and consumers.
Her first Budget will set the tone for Labour’s economic approach and will be closely scrutinised by businesses, unions and voters.
The warnings from Betfred, Tui and Jet2 suggest some business leaders believe she is considering tax rises that could prove economically counterproductive.
Budget Day Looming
As Budget day approaches next month, speculation continues about which sectors will face tax increases.
Reeves has insisted that “tough decisions” are necessary but has provided little detail about where the axe will fall.
The betting and travel industries’ warnings may be designed to head off tax rises before they are announced, giving the Chancellor an opportunity to reconsider.
As pressure mounts from multiple sectors facing potential tax rises, Reeves must decide whether targeting “fun” activities is politically and economically wise or whether alternative revenue sources should be prioritised.
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