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Ladbrokes loses $115m tax battle with HM Customs & Revenue

Ladbrokes UK
AFTER years of wrangling in the courts, Ladbrokes has lost its battle with the British government over a tax evasion plot dating back nearly a decade.

The betting firm was ordered to pay £54 million (AUD $87.4m) to Her Majesty’s Revenue and Customs in December 2015 after exploiting a loophole in laws regarding the taxation of business loans in 2008.

Those gaps were closed up that same year and fortified the year after, since when the HMRC has pursued legal action against all 11 companies that attempted to take advantage of the legislative weak spot.

In the initial hearing, Ladbrokes admitted to manufacturing a deal in which one of the company’s divisions recorded a drop in share price while another claimed tax losses as a result.

It has spent the last 14 months fighting the guilty verdict after lodging an appeal with the Upper Tribunal of the Tax and Chancery Chamber.

But now the bookie finds itself even deeper in the hole.

Late last week, the court dismissed all three of the arguments put forth by Ladbrokes and ordered the firm to pay the taxman to the tune of £71 million (AUD $115m).

HMRC director Jennie Granger rubbed more salt into the wound, telling reporters that the company should have copped the initial finding on the chin and paid up.

“Ladbrokes would have been better off just paying the tax but instead they pursued this lengthy legal dispute with HMRC,” she said.

“Avoidance schemes like this just don’t work and HMRC will always take firm action against them.

“The bookie gambled and lost when the odds of success could not have been lower.”

It is a much-needed win for the HMRC, which was forced to pay back £97 million (AUD $157m) in wrongfully taxed earnings to Sportech last December after a tortuous seven-year legal war.

For the Ladbrokes Coral alliance, this case was but one in a series of recent ventures to the courtroom.

A punter in the UK lodged a lawsuit against Coral in January after the bookie refused to honour a future bet on the Scottish Premier League.

In 2011, Mr Albert Kinloch put £100 on Rangers to be relegated at +250000 odds.

The Gers were dumped into the fourth tier of Scottish football in 2012 after going into liquidation, but Coral claims the club was not technically relegated.

If successful, Mr Kinlock will stand to win £250,000 (AUD $404.7k) plus costs and damages.

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