GVC Holdings has become the latest firm to follow a number of industry counterparts in seeking compensation from Her Majesty’s Revenue & Customs owed from tax charges related to fixed-odds betting terminals
After William Hill followed the lead of Betfred and Rank Group earlier in the week, with the bookmaker potentially positioned to secure a multi-million pound tax rebate, GVC estimates that it’s own claim will result in a cash inflow to the group of approximately £200m.
The sports betting and gaming group “understands” that it will be eligible for a rebate of historic VAT incorrectly paid on gaming machine revenues from its Ladbrokes betting shops in the period from October 1, 2002, to January, 2013.
In its media statement the group comments that it ”learned that the UK tax authority, HMRC, has taken the decision not to appeal the ruling of the Upper Tribunal (Tax and Chancery Chamber) in the cases of the Done Brothers (Cash Betting) Ltd (trading as Betfred) and Rank Group PLC concerning the application of VAT to certain gaming machines and fixed odds betting terminals within licensed betting shops”.
Adding: “The Rank dispute concerned the VAT liability of gambling made using certain gaming machines prior to December 5 2005 while the Done Brothers dispute related to the tax treatment of supplies of gambling by means of fixed odds betting terminals during the period prior to January 31 2013.”
Having previously lost two separate court rulings against Betfred and Rank, HMRC announced last week that it would no longer pursue further tribunal judgement on the tax dispute.
Following the High Court ruling, William Hill became the first bookmaker to seek compensation from the government, stating it was examining scenarios related to its rebate fee.
“Whilst William Hill currently expects the net cash recovery to be material, its precise quantum remains uncertain. Nevertheless, the board has considered a number of scenarios which suggest a potential net cash recovery of between £125m and £150m,” the group detailed in a media statement.