Generous Labour donor causes embarrassment for Ed Miliband as it emerges that he saves 13million using tax haven
Peter Coates has donated 300,000 to the Labour party in the past decadeHe has built a 700million fortune on the back of betting site bet365But, a third of its profits come from a subsidiary based in GibraltarBetween 2009 and 2011, company paid 10% corporation tax, saving 13million
00:42 GMT, 25 November 2012
Ed Miliband faced embarrassment in his crusade against tax avoiders last night after it emerged a key Labour donor has saved millions of pounds by running online gambling from a tax haven.
Peter Coates, chairman of bet365, has donated 300,000 to the party in the past decade, including 10,000 to Mr Miliband this year.
Mr Coates has built a 700 million fortune on the back of the firm, one of the world’s largest internet sites for sports betting.
Peter Coates (left) has donated 300,000 to the Labour party in the last decade and 10,000 to Ed Miliband this year. A third of his business profits come from a subsidiary based in Gibraltar
But company accounts filed in Gibraltar reveal more than a third of bet365’s profits come from its subsidiary based in the British overseas territory. Between 2009 and 2011 it paid a ten per cent rate of corporation tax in Gibraltar – compared with 28 per cent in the UK at the time – saving 13 million.
Mr Miliband has described tax avoidance as ‘a terrible thing’. Labour’s policy review – which constitutes an early draft of the party’s next Election manifesto – included a paper that said: ‘Labour believes addressing tax avoidance at an individual and corporate level must be a priority.
‘At home, this means making it plain to the Crown Dependencies [such as Gibraltar] we will expect them to observe the letter and the spirit of the law.’
It is not the first time Mr Coates has seen his party links come under scrutiny.
Between 20089 and 2011, bet365 paid a ten per cent rate of corporation tax in Gibraltar (pictured) compared with 28 per cent in the Uk, saving 13million
When Gordon Brown was Prime Minister, the gambling tycoon was accused of paying a 100,000 ‘thank you’ to Labour in the form of a donation after his firm benefited from the controversial decision to relax the betting laws.
Last night, bet365 said it was unfair to highlight the tax advantages it enjoys because, unlike its main competitors, it paid UK tax on the majority of its operations.
A spokesman said: ‘Bet365 is the only major online bookmaker that remains licensed in the UK and as such pays more than 130 million in annual taxes to the UK Treasury.’
The company’s accounts show that in 2009-10 it saved 8 million by paying company taxes at the ten per cent then applicable in Gibraltar compared with the 28 per cent rate in the UK. The following year it saved a further 4.9 million by the arrangement.