GBP 70 million at stake in dispute with HMRC
Online and land gambling group Ladbrokes Coral is planning to take on appeal its 2008 tax dispute with Her Majesty’s Revenue and Customs to the UK Court of Appeal, with GBP 70 million riding on the result, according to reports in the British business media.
The case involves allegations that that the company deliberately exploited a 2008 tax loophole relating to loans between corporations and third parties as it sought to reduce its tax liability (see previous InfoPowa reports).
Advised by the Deloittes professional business services group, Ladbrokes allegedly formed a “transacting subsidiary” in order to move corporate tax liabilities to a single business that generated losses, thus ameliorating the tax hit.
HMRC claimed that over the 2008 tax period Ladbrokes suffered no de facto losses but was able to benefit from the “transacting subsidiary” strategy. Ladbrokes was not alone in following Deloittes’ advice…nine other corporates were caught in the same net and paid up when challenged by HMRC.
Thus far the company has not been successful in its three-year fight through the UK tax courts, and the Court of Appeals could be its last opportunity to have the earlier rulings against it set aside.
The appeal will probably be heard early in 2018.