Ladbrokes loses £71m court battle with HMRC
Operator hit with hefty bill after losing an appeal over its use of tax avoidance scheme promoted by accountancy firm Deloitte
Ladbrokes has been hit with a £71m bill after losing a long-running court battle with HM Revenue and Customs (HMRC) over its use of a controversial tax avoidance scheme.
The London-listed operator used a Deloitte-promoted tax avoidance programme in 2008 as part of a strategy to reduce its corporation tax bill via a legal loophole that has since closed.
According to HMRC, the scheme involved an “artificially manufactured” share price fall in one of Ladbrokes’ subsidiaries, generating a loss in another group subsidiary to minimise its tax bill.
Ladbrokes admitted the programme, which led to no real group losses, aimed to reduce the amount it paid in corporation tax but claimed it was not caught out by anti-avoidance rules.
The Upper Tribunal of the Tax and Chancery Chamber ruled in favour of HMRC following an appeal by Ladbrokes against an earlier decision by the First-Tier Tribunal in 2015.
HMRC’s director general for customer compliance, Jennie Granger, said: “Ladbrokes would have been better off just paying the tax but instead they pursued this lengthy legal dispute with HMRC.
“Avoidance schemes like this just don’t work and HMRC will always take firm action against them. The bookie gambled and lost when the odds of success could not have been lower.”
Ladbrokes declined to comment when contacted by EGR Intel this morning.