Ladbrokes said it is to consider its options after losing out in a tax avoidance case worth £53 million (€76.1 million/$80.6 million) against UK tax authority Her Majesty’s Revenue and Customs (HMRC).
According to the CityAM.com website, a tribunal ruled that Ladbrokes used a tax avoidance scheme, promoted by leading accountancy firm Deloitte, through which it was able to avoid paying tax while not incurring any real economic losses.
Ladbrokes took advantage of a loophole in the law that enabled two companies in the bookmaker’s group to enter arrangements that manufactured a drop in the value of shares in one company so that a tax loss could be created in the other.
HMRC said this type of scheme, which exploited a gap in the law that existed in 2008 but was also closed in the same year, had 11 users in total, of which seven have paid up owed tax before the case reached a tribunal hearing.
However, the ruling at the first-tier tribunal in the Ladbrokes case now prevents the bookmaker from reclaiming £54 million in tax, with HMRC stating it also has another three similar cases on its books worth £112 million.
“Avoidance just doesn’t pay – we win around 80 per cent of cases taxpayers choose to litigate and many more concede before litigation,” HMRC director general of business tax, Jim Harra, said.
“We will uncover the avoidance schemes and contrived structures designed to minimise tax and we will challenge them.”
In response to the ruling, a Ladbrokes spokesperson said: “We believed we had a strong argument in this case. We’re now considering our options with regards to a possible appeal.”
source : www.igamingbusiness.com
