UK-based online gambling and entertainment company, Sportech, has won a long-running battle against Her Majesty’s Revenue & Customs (HMRC) and has been paid £93 million after the Court of Appeal ruled in their favour last month.
Sportech filed a claim against HMRC in 2009 over their Spot the Ball game which ran for more than fifty years and was a popular choice among its players. Specifically, they claimed that they should have been exempt from paying VAT between 1979 and 1996 as the game is a game of chance and it claimed it should be repaid £40 million in VAT plus interest.
The First-Tier Tribunal’s Tax Chamber (TTC) first heard the claim in 2012 and it ruled in Sportech’s favour in March 2013. HMRC appealed the decision and in September 2014 the Upper Tribunal (Tax and Chancery Chamber) reversed the original decision and ruled in favour of HMRC.
In January 2015, the Upper Tribunal gave Sportech the right to appeal their decision in the Court of Appeal and in May 2016, Sportech won the appeal with the judges ruling unanimously in their favour. HMCR was ordered to pay £97 million. They have already paid £93 million of the amount and in the event that they lose their appeal of the decision, they will be required to pay another £4 million.
The Court of Appeal gave permission for HMRC to take the ruling to the next level of appeals and earlier this month they turned to the Supreme Court. If the Supreme Court once again overturns the previous ruling and finds in favour of HMRC, Sportech will need to repay the £93 million with interest. The final judgment is expect to be returned at the end of 2017 or beginning of 2018.