UK gambling operator Sportech announced that it has closed the final page of a seven-year tax dispute with Her Majesty’s Revenue and Customs after the Supreme Court had denied the latter party permission to appeal.
The long-standing legal case stemmed from a VAT repayment filing the gambling operator submitted to court in 2009. Sportech wanted to have VAT repaid on ‘Spot the Ball’, a product it offered between 1979 and 1996. The company claimed that the game was one of chance and was thus exempt from VAT. However, HMRC collected £40 million in said tax on the game, an amount Sportech wanted back plus added interest.
In June, Sportech received a total of £93 million from HMRC. The operator is to receive the additional amount of £4 million anytime soon. Legal costs are to be paid by HMRC. These are still to be assessed.
It has also become known that Sportech may receive two times the above-mentioned amount as it submitted another claim back in 2009 asking for a compound interest (and not just simple interest) “on the amount of overpaid VAT.” Said claim is yet to be heard by the Supreme Court.
Commenting on the announcement, Sportech CEO Ian Penrose said that they are happy to be closing an almost eight-year case.
A chronology of the legal dispute shows that the gambling operator originally submitted its claim in 2009 and it was reviewed by the First-Tier Tribunal’s Tax Chamber three years later. In 2013, the Tribunal ruled in Sportech’s favor.
The HMRC appealed the case to the Upper Tribunal, which ruled in favor of the UK Government’s tax department. The decision was announced in May 2014. Early in 2015, Sportech was informed that it would be able to appeal the decision to the Court of Appeal. A hearing was held in April 2016 and a month later a ruling came that the Court of Appeal had ruled in the gambling operator’s favor.
Days after that decision came out, the HMRC sought to appeal the case to the Supreme Court, a move it has been denied. It became known in June that the HMRC had filed an application to directly appeal to the Supreme Court.
