Ladbrokes Coral takes tax dispute with HMRC to higher court

Ladbrokes Coral takes tax dispute with HMRC to higher court

Thursday, October 19, 2017 Posted by Luke Massey
The £70 million case relates to a 2008 scheme by Deloitte

Ladbrokes Coral has confirmed that its £70 million UK Revenue & Customs (HMRC) ‘tax avoidance’ dispute will be heard by the UK Court of Appeal.

The FTSE-listed gambling group will seek to overturn February’s decision by the UK Tribunal Court to side with HMRC’s claim that Ladbrokes (pre-Coral merger) had ‘knowingly exploited a 2008 tax loophole relating to loans between corporations and third parties’.

In March of this year, Ladbrokes Coral put forward an appeal for a rehearing by the Court of Appeal, the UK’s second highest law court.

The firm’s tax avoidance dispute with HMRC relates to a 2008 scheme implemented by Ladbrokes accountancy firm Deloitte, which advised several clients to create ‘transacting subsidiaries’ in which corporations could transfer corporate tax charges, ‘creating a single loss-generating unit’.

HMRC, a non-ministerial department of the UK Government responsible for the collection of taxes, stands by its claim that Ladbrokes made no losses during the full-year 2008 fiscal period and that it knowingly implemented Deloitte’s scheme to exploit the loophole and renege on its tax duties.

Backing this claim, HMRC states that the nine UK corporations which used Deloitte’s scheme had conceded wrongdoing and paid the taxes owed. In its defence, Ladbrokes stated that it had implemented the scheme to reduce its corporate tax burden, but argued that at the time its operational set-up fell outside the remit of HMRC anti-tax avoidance rules.

Totally Gaming says: Industry analysts will be keeping a close eye on this Ladbrokes tax dispute. A high stakes court battle with HMRC will be the last thing the company needs, coming into its first full year as an enlarged enterprise seeking to deliver +£150 million in group savings.

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