Thursday 30. June, 2016

Sportech Wins VAT Appeal for £93 Million

UK-based pool betting operator, Sportech, has confirmed the repayment of £93 million from Her Majesty’s Revenue & Customs (HMRC) after winning an appeal of a VAT dispute that has been running since 2009. However, despite the payment, the issue is not closed and a final ruling by the Supreme Court is expected to be made on HMRC’s appeal.

Sportech originally submitted a claim in 2009 concerning VAT paid on their Spot the Ball game between 1979 and 1996. The operator argued that since the game is a game of chance they should have been exempt from paying VAT.

They filed a claim for repayment of £40 million in VAT, plus added interest. The claim was heard by the First-tier Tribunal’s Tax Chamber (TTC) in 2012 and who ruled in favour of Sportech in March 2013. In September 2014, an appeal by HMRC to the Upper Tribunal (Tax and Chancery Chamber) overturned the ruling.

Sportech was awarded the right to appeal the decision to the Court of Appeal in January 2015 and in May 2016, the judges ruled unanimously in favour of the operator. HMCR is not letting the matter rest and earlier this month they lodged an appeal with the Supreme Court after being granted permission to do so by the Court of Appeal.

While this has been a long-running case, this is the final stage for the two sides. If the Supreme Court overturns the ruling from the Court of Appeals and finds in favour of HMRC, the £93 million will need to be repaid in full along with any related interest. If HMRC’s final appeal fails, they will need to pay Sportech an additional £4 million.

The final decision by the Supreme Court is expected to be made by late 2017 or early 2018.


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