HMRC: “Avoidance doesn’t pay”
U.K. bookmaker Ladbrokes, soon to merge with the Gala Coral Group, has lost a tax-avoidance case that will leave it poorer by £54 million (US$82 million). According to reports, two Ladbroke subsidiaries, Ladbroke International and Travel Document Service, conspired to artificially manufacture a decline in the value of the shares of one company to create a loss in the other company, thereby reducing its tax burden, reported the U.K. Daily Record.
However, the group suffered no real economic loss, reported the website Yogonet.com.
A spokesman for Ladbrokes told Accountancy Age it may fight the ruling from HM Revenue and Customs. “We believed we had a strong argument in this case. We’re now considering our options with regards to a possible appeal.”
Jim Harra, HMRC’s director general of business tax, replied, “Avoidance just doesn’t pay—we win around 80 percent of cases taxpayers choose to litigate and many more concede before litigation. We will uncover the avoidance schemes and contrived structures designed to minimize tax and we will challenge them.”
