Sportech to mull over possible appeal of HMRC VAT ruling

Sportech to mull over possible appeal of HMRC VAT ruling

Wednesday, September 17, 2014 Totally Gaming

Ian Penrose, the chief executive of Sportech, has told TotallyGaming.com that it is “too early” to decide whether the pool and tote betting services supplier will appeal an order to pay back £93m (€117m/$152m) to HMRC, the UK’s tax authority.

The UK’s Upper Tribunal (Tax and Chancery Chamber) upheld an appeal yesterday (Tuesday) by HMRC against an initial ruling by the First-tier Tribunal in relation to a VAT repayment claim on Sportech’s ‘Spot the Ball’ game.

The First-tier Tribunal last year found in Sportech’s favour, leading to HMRC to pay Sportech £93m in June. However, following the appeal, the Upper Tribunal has now concluded that ‘Spot the Ball’ is a game of skill rather than chance, with VAT therefore applicable.

Sportech must now repay the £93m plus £3m in other charges, although it has until October 15 to seek permission to appeal.

“We are obviously disappointed,” Penrose (pictured) told TotallyGaming.com.

“We are looking at the judgement very closely. It is too early to say at this moment in time whether we will appeal, but we will make a decision in light of all of the information at our disposal, and we will announce our decision when the time is right.”

In a process that has dragged on for more than five years, Sportech has always claimed that it mistakenly paid VAT on the game from 1979 to 1996.

With reference to the length of the legal proceedings, Penrose added: “Anything that takes so long is inevitably frustrating, but that is the nature of the process.”

When asked about the timeframe for the possible repayment by Sportech to HMRC, a spokesperson for the tax authority told TotallyGaming.com: “We do not comment on the tax affairs of a named business but where the First Tier Tribunal finds in favour of a business the rules are that we should repay the tax if asked to.

“However, when we are appealing the decision to the Upper Tribunal we would issue what is called a protective assessment so we can recover any repaid tax in the event that the higher courts finds in our favour.”

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