Betfred to be refunded £100 million in V.A.T
UK bookmakers Betfred have recently been at the centre of a court case which has challenged HM Revenues & Customs (HMRC) over V.A.T which they felt was wrongly imposed on the revenue generated from Fixed-Odds Betting terminals. The court ruling means that Betfred could now be entitled to around a £100 million refund.
This isn’t the first case of its kind either. In 2016, Sportech took on an eight year battle with HMRC, successfully managing to claim back the £97million they had paid in VAT.
Fixed Odds Betting Terminals
The case in centred on the V.A.T imposed on the Fixed-Odds Betting Terminals (FOBTs) between 2005 and 2013 claiming that the fiscal neutrality was violated by the collection of V.A.T and the tax tribunal upheld the claim.
This is a huge victory for gambling operators, especially since the Government announced plans to slash the maximum bet on Fixed-odds terminals from £100 to £2. Initially FOBTs had to pay betting tax at 15%, with V.A.T then being imposed in 2005. In 2013, this was then replaced by a 20% Machine Games Duty was again was subsequently raised to 25%.
Victory for gambling operators
The case was criticised by anti-gambling campaigners claiming it has further delayed the implementation of the new FOBTs maximum stakes, which HM Treasury has already delayed until 2020 in order to offset industry losses. For other gambling operators this comes as good news; they may now be able to claim back tax paid during the 2005-2013 period as well as having another 2 years before being forced to implement the new lower threshold for FOBTs.
At the moment, it’s unclear as to whether HMRC will appeal against the ruling, but if it doesn’t this could mean V.A.T refunds for Bookmakers in the UK of at least £1 billion.