After a tax tribunal took place last month, a ruling found major betting operators had been overcharged VAT by HMRC on Fixed Odd Betting Terminals (FOBT’s) for at least eight years.
Claim Overpaid Tax
William Hill and GVC are in a position to claim back overpaid taxes from HMRC to the tune of £350m, after casinos and bookies won a legal battle over tax paid on these machines. HMRC are not appealing the ruling, which leaves a clear path for these operators to submit a rebate claim.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.” GVC are set to benefit up to £200m in overpaid tax and shares have since risen by 2% after the ruling. William Hill’s shares climbed by 6% after the news broke of the ruling.Betfred and the Rank Group, owners of Mecca Bingo originally brought the claim against HMRC after they disputed, FOBT’s are similar to casino roulette wheels, which are exempt from sales tax.
£125-£150m William Hill Claim
Its thought many more gambling operators will take action based on the ruling, with claims up to hundreds of millions. William Hill said the claims are, “ substantially similar to those provided in the VAT challenge. Whilst William Hill currently expects the net cash recovery to be material, it’s precise quantum remains uncertain. Nevertheless, the board has considered a number of scenarios which suggest a potential net cash recovery of between £125m and £150m.”Clawing back overpaid tax will be a welcome relief for operators as profits have taken a severe knock during the Covid-19 pandemic, after the postponement of sporting events globally.