Ladbrokes fails to recoup £71m from HMRC in long-running dispute

Business News

The UK Court of Appeal rejected an appeal lodged by Ladbrokes in relation to the gambling operator’s decade-long £71-million tax avoidance battle with HM Revenue and Customs.

The dispute relates to a 2008 tax scheme deployed by Ladbrokes and accountancy firm Deloitte that exploited a legal loophole to avoid a higher corporate tax bill. The loophole was closed by the UK Government the same year.

Back then, Delloite advised several of its clients, Ladbrokes included, to establish “transacting subsidiaries” within their groups and to transfer corporate tax charges into these. The larger groups created just a single unit that was generating losses.

The Court of Appeal unanimously rejected Ladbrokes’ appeal to recoup the £71m, agreeing with two earlier tribunal decisions that found that HMRC’s rules prevented Ladbrokes’ attempt at a tax advantage.

​A spokesperson for Ladbrokes told City A.M: “We note the court ruling. This was a case regarding taxes already paid and accounted for, so while the case may have been given against us, it has no bearing on our numbers.”

An HMRC spokesperson added: “We are pleased that the Court of Appeal supports HMRC’s view that Ladbrokes were attempting to avoid corporation tax. Avoidance schemes like this just don’t work and HMRC will always take firm action against them. HMRC wins nine out ten avoidance cases we take to court.”