Ladbrokes loses legacy £71 million HMRC tax dispute

The UK Court of Appeal has rejected Ladbrokes Coral’s £71 million tax avoidance claim, siding with UK Revenue & Customs (HMRC) over the decade-long legal dispute.

In October 2017, Ladbrokes Coral governance had taken its dispute to the Court of Appeal, having lost a three-year-long hearing at the UK Tribunal Court.

The Ladbrokes legacy tax avoidance case relates to a 2008 scheme implemented by accountancy firm Deloitte who advised a number of its international partners to ‘deliberately’ create ‘transacting subsidiaries’, in order to shift corporate tax charges under one single ‘loss-generating business unit’.

Throughout the ten-year dispute, HMRC maintains that Ladbrokes had ‘knowingly exploiting a 2008 tax loophole relating to loans between corporations and third party properties’ in order to minimise Ladbrokes full-year tax bill.

Upholding its defence, Ladbrokes has stated that although Deloitte’s scheme was designed to ‘avoid tax’, the provisions implemented by the accountancy firm were within the limits of UK business laws.

In previous hearings, HMRC had pointed to UK courts that nine Deloitte partners which had used the scheme had conceded responsibility and paid the taxes owed to the UK government.

This week, UK Court of Appeal judges rejected Ladbrokes Coral’s latest attempt to overturn the tax avoidance charges, agreeing with earlier tribunal decisions that Deloitte’s scheme had breached UK tax policies.

“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.” Detailed HMRC in its court update