Bookmakers Win potential £1 billion VAT refund from HMRC

A ruling by the tax tribunal in April has found in favour of bookmakers regarding HMRC overtaxing of Fixed Odds Betting Terminals (FOBTs) for the last eight years. Following this decision HMRC the UK governments tax collector said it would not appeal the decision paving the way for companies such as William Hill and GVC who operate Ladbrokes and Gala Coral to claim back hundreds of millions of pounds.

According to the ruling by the tribunal HMRC overcharged VAT on the FOBTs for several years and both companies paid the overcharged VAT however they were constantly in dispute on the inflated VAT from 2005 to 2013.

Following the decision William Hill said, “As a result of this announcement, we will now engage with HMRC to agree the support for, quantum and timing of the refund.”

It is estimated that GVC could collect somewhere around £200 million from the overcharging from HMRC and William Hill around £150 million. However there are many other bookmakers who will now claim refunds and estimates have the total refund around £1 billion including Flutter who operate the Paddy Power bookmaker brand.

William Hill said it had submitted claims “substantially similar to those provided in the VAT challenge”. “Whilst William Hill currently expects the net cash recovery to be material, its precise quantum remains uncertain,” the company added. “Nevertheless, the board has considered a number of scenarios which suggest a potential net cash recovery of between £125m and £150m.”