Gordon Brown has urged the Treasury Select Committee to broaden its ongoing review of gambling taxation after ITV News revealed that Sky Bet, owned by Flutter Entertainment, has shifted its headquarters to Malta.
The move, according to tax specialist Dan Neidle of Tax Policy Associates, could reduce the operator's effective corporation tax rate to around 5%, compared with 25% in the UK.
Sky Bet's relocation has prompted questions about whether gambling companies are restructuring to minimise tax exposure.
Based on Sky Bet's most recent annual profits, Neidle estimated a potential UK tax saving of up to £31m ($40.5m). He also identified a separate VAT arrangement which he believes could have lowered VAT on Sky Bet's marketing spend by up to £24m.
Brown said the findings raise serious concerns about potential tax avoidance that warrant thorough investigation and called for MPs to assess issues including transfer pricing and VAT treatment within the sector. His intervention comes as the Treasury Select Committee examines gambling taxation ahead of next week's Budget.
Earlier in the day, the prime minister did not directly answer a question from Liberal Democrat leader Sir Ed Davey on whether the government would act to prevent gambling firms shifting profits offshore. Davey noted that online operators generate more than £7bn in annual revenues.
Sky Bet's relocation follows HM Treasury's announcement of higher betting duties from 2024, prompting several operators to review their UK tax positions, as previously reported by Global Gaming Insider.
Flutter acknowledged that the Malta move will have some tax implications but said it complies with tax laws across all jurisdictions. The company added it remains one of the UK's largest taxpayers.
MPs are expected to continue examining the sector's tax position as part of the wider Budget process.
The Treasury declined to comment, while No 10 and the Betting and Gaming Council have been approached for response
