""Not true, Don. You did not pay a tax on the bet. You increased the bet by the amount of the tax. Without paying it, if you had a £1 bet and it came in at 100 to one you won £100 and paid, if tax was 10% for the sake of ease, £10 tax giving you winnings of £90.

What you did by paying it on the bet, was increase your winnings to cover the tax so if you bet £1.00 and paid 10% tax - Ie a £1.10 bet - you won £110 and the extra £10 weant to the taxman. No tax was avoided as the bookie gave your extra £10 to the taxman.""

Since my reason for posting was to point up the fact that gambling winners pay no tax on this unearned income, my original statement was valid as far as the above is concerned.

In your own example, your winner paid 10p extra on the bet to avoid £10 on the winnings. The fact that the tax was paid to the government is neither here nor there. The punter paid 10p.

Other forms of gambling attract no tax whatever. We have three lotteries every Saturday, one on Wednesday, a new one on Friday, and countless scratch cards and accessible foreign lotteries.

I have a feeling that petrol could be a damn sight cheaper if tax were levied on winnings at unearned income rates. And seeing that it was announced yesterday that UK inflation had jumped fom a negative amount to 3.4% in a couple of months, largely due to soaring petrol and diesel prices, it may be a necessity.

Perhaps one of our US friends could tell us what the IRS takes out of gambling winnings over there.

Don T.