Bookmakers are in line for a £1bn tax rebate after a court ruled they were wrongly charged VAT on revenue from controversial fixed-odds betting terminals (FOBTs).
The finding, in a case brought against HM Revenue & Customs by the high-street bookmaker Betfred, will be seen as a major victory for an industry reeling from the government’s decision earlier this year to slash the maximum bet on FOBTs from £100 to £2.
A tax tribunal ruled that collecting VAT on FOBTs between 2005 and 2013 had “breached the principle of fiscal neutrality” because similar roulette-style games played in casinos and online were exempt from the tax.
A spokesperson for HMRC declined to say whether it would appeal against the verdict, but said: “This is an important judgment and HMRC is giving it careful consideration.”
If HMRC does not seek to overturn the ruling, or is unsuccessful in its appeal, the rebate for the whole of the bookmaking sector is expected to be at least £1bn. Industry sources said Betfred alone was likely to reclaim £100m.
The industry-wide figure is based on the rate of VAT paid on combined income from FOBTs between 2005 and 2013, which amounts to more than £8bn plus interest.
Campaigners speculated that concern within the Treasury that Betfred, which is owned by the billionaire Conservative party donor Fred Done, would win the case might have been behind its much-criticised decision to delay implementation of the FOBT stake reduction until April 2020. The Treasury already plans to offset the loss of duty from the machines by increasing the tax on online gaming to 20%.
For more read the full of article at The Guardian
