A significant return
UK gambling companies GVC Holdings and William Hill are set to get as much as £350m ($428m) back from the HMRC (Her Majesty’s Revenue and Customs) after winning a legal battle relating to taxes they paid on fixed-odds betting terminal (FOBT) revenues.
William Hill will be able to file a rebate claim that could be worth from £125m ($153m) to £150m ($183m)
The upper tax tribunal ruled in April that the two gambling companies were overcharged for value-added tax (VAT) for a period of at last eight years. According to a William Hill statement, there will be no appeal from the HMRC. This means that William Hill will be able to file a rebate claim that could be worth from £125m ($153m) to £150m ($183m).
The company said: “As a result of this announcement, we will now engage with HMRC to agree the support for, quantum and timing of the refund.”
GVC Holdings is the parent company of a number of notable gambling brands, including Ladbrokes and Coral. While it has not publicly commented on the matter, it previously stated that a court ruling in its favor could lead to a VAT rebate of £200m ($244.6m).
The details of the case
The issue originates from a case that gambling companies Betfred and Rank brought against the HMRC relating to VAT payments made from 2005 until 2013. The ruling from Judge Thomas Scott and Mr Justice Mann was that the HMRC should not have levied any VAT charge on takings from FOBTs. This is because these machines are similar to roulette wheels that are not subject to any sales tax.
This latest ruling will open the door for other gambling companies that were operating FOBTs in the UK market to also benefit from a VAT refund.
If the gambling operators concerned secure a cash windfall as a result of the ruling, it will come at a welcome time. Retail gambling stores have been shut for two months because of the coronavirus pandemic. The likes of online sportsbooks have also suffered significantly as sporting events across the world have been postponed or canceled.
UK gambling companies have issued profit warnings, cut dividends, and furloughed many workers during the COVID-19 crisis
Green shoots are starting to appear, with the Bundesliga German soccer league getting back to action behind closed doors and English Premier League teams going back to training.
UK gambling companies have issued profit warnings, cut dividends, and furloughed many workers during the COVID-19 crisis. They have been able to take advantage of government relief programs for businesses during this time.