UK bookmakers in line for a £1bn tax rebate

A court ruled that they were wrongly charged VAT on revenue from fixed odds betting terminals.

UK.- The gaming industry in the UK has suffered a major set back this year, as it was revealed that in the next couple of years the maximum stake on fixed odds betting terminals (FOBTs) will be reduced from £100 to £2. However, a court has now ruled that operators have been wrongly charged a tax.

The case started after Betfred took HM Revenue & Customs to court over the VAT on revenue from FOBTs. A tax tribunal ruled that collecting VAT on FOBTs between 2005 and 2013 had breached the principle of fiscal neutrality because similar roulette-style games played in casinos and online were not subject to the tax.

While a spokesperson for HMRC didn’t indicate if the entity would appeal the verdict, it said that it is an important judgment and that HMRC “is giving it careful consideration.” If HMRC doesn’t appeal the ruling or is unsuccessful in it, the rebate for the sector is expected to be at least £1 billion, and Betfred alone would likely claim £100 million.

Betfred’s managing director, Mark Stebbings, said: “We welcome the decision regarding the historical tax treatment of FOBTs, which pre-dates the introduction of machine games duty in February 2013. It does not concern Betfred’s ongoing tax liabilities.”