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UK Court hears Ladbrokes Coral

UK Court of Appeal hears Ladbrokes Coral’s tax avoidance claim

Ladbrokes Coral is set to take their claim against a £70m tax avoidance dispute to the UK Court of Appeal. The Second highest UK court of law is set to receive the claim later this week, in the latest part of an ongoing saga which stems back to 2000. HMRC (UK Revenue and Customs) had previously charged Ladbrokes in 2008 with “exploiting a tax loophole relating to loans between corporations and third parties” in a bid to reduce the popular UK bookie’s tax bill over the course of the year.

It was a scheme put forward by Deloitte, the famous accountancy firm, who told their partners to create “transacting subsidiaries” to move corporate tax charges into a single loss generating figure. HMRC claims that Ladbrokes suffered no actual losses during the first period of 2008 and that they used a loophole to avoid paying corporate taxes. Ordinarily, this sort of thing may have been found in Ladbrokes favour, but HMRC is adamant that since 9 other businesses used the same loophole, and all have since pleaded guilty to the scheme, Ladbrokes will surely be no exception.

Defeat at the UK Tribunal Court

In February, Ladbrokes Coral took their 3-year appeal to the UK Tribunal Court, which agreed with HMRC, that Ladbrokes was using a legal loophole to bypass paying corporate tax. However, the UK Tribunal Court did give Ladbrokes Coral the right of appeal to the next highest UK court of law, a move which this week Ladbrokes Coral have said they are taking.

Ladbrokes claim that although they did indeed use a loophole to avoid paying corporate tax, its operations were legal in a court of law and that its operations did not breach any existing anti-avoidance rules or regulations. The case continues.

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