Gambling firms including Betfred, Rank, William Hill and GVC will finally be able to claim UK tax rebates totalling more than £1billion.
UK.- Gambling firms including BetFred, Rank, William Hill and GVC will finally be able to claim tax rebates of more than £1billion in mischarged VAT payments after UK revenue and customs (HMRC) confirmed it would not challenge a legal ruling in the firms’ favour.
The rebate will mark the end of the £1billion legal battle brought by bookmakers and casinos over the sales tax paid on fixed-odds betting terminals (FOBTs) prior to the year 2013.
Last month the UK’s highest tax tribunal decided in favour of the companies arguing that gambling firms had been overcharged VAT for at least eight years. HMRC has now confirmed that it will not appeal against the ruling, clearing the way for companies to submit claims for tax rebates.
The victory is reported to be worth close to £1billion for Betfred and Rank, and sets a precedent for other gambling companies to lodge claims for hundreds of millions more.
Bookmaker William Hill is likely to be able to claim a tax rebate of between £125million and £150million. GVC has previously said it could reclaim around £200million.
A spokesperson for William Hill said: “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 £125million and £150million.”
The case was originally brought against HMRC by the bookmaker Betfred and Mecca Bingo owner, Rank, over VAT payments levied prior to 2013.
The 2005 Gambling Act removed a VAT exemption for FOBTs despite it remaining in place for casino, online and electronic roulette wheels.
An appeal from operators to the Court of Justice of the European Union led to VAT on FOBTs being finally replaced by a machine games duty in 2013, originally set at 20 per cent before being raised to 25 per cent of GGR in March 2015.
The court last month decided that HMRC should not have charged VAT on FOBT takings prior to 2013 because the machines were similar to roulette devices
FOBTs were seen as highly lucrative until the government reduced the maximum amount that could be staked from £100 to £2 following complaints about problem gambling.