Bookmaker Ladbrokes has lost an appeal over a £71 million tax avoidance case, after judges sided with HM Revenues and Custom (HMRC). Ladbrokes had used a tax planning scheme from 2008 which exploited a loophole in a tax code relating to the taxation of loans. The scheme was devised by Deloitte, and was advised upon by law firm, Slaughter and May. However, the loophole was closed in 2008, one year prior to legislation being implemented to tighten the gap in taxation of loans.
HMRC pleaded on the grounds of anti-avoidance rules. There were originally 11 users of the same scheme used by Ladbrokes, but it is believed that nine of these users conceded before the Tribunal hearing, and paid the tax owed. HMRC’s Director General for Customer Compliance, Jennie Granger, said, “Ladbrokes would have been better off just paying the tax but instead they pursued this lengthy legal dispute with HMRC. 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.”