Sportech hit by £93m tax judgment
Share price drops 25% as HMRC successfully appeals against earlier decision which saw operator reclaim overpaid VAT
Sportech has been ordered to repay the £93m it had previously reclaimed in overpaid value added tax (VAT) after Her Majesty’s Revenues and Customs (HMRC) successfully appealed the decision to award the sum.
The ruling of the Upper Tribunal (Tax and Chancery Chamber), which was announced this afternoon, relates to overpayments in VAT relating to ‘Spot the Ball’ competition run by Sportech subsidiary Littlewoods between 1979 and 1996.
The operator announced that it had received the payment in June, however will now have to repay the full sum “in due course” pending an appeal for which it must seek permission by 15 October 2014.
Sportech’s claim was initially rejected in December 2010, however it successfully lodged a formal appeal against the decision last year and had been hoping for an additional £3m payment following the HMRC appeal.
The news has had an immediate impact on Sportech’s share price, with its value tumbling 25% to 58p at the time of writing.