Shares in London-listed operator Sportech fell by more than 24 per cent in London Tuesday after the UK tax authority, Her Majesty’s Revenue and Customs (HMRC), successfully appealed against the decision to award the company £93m in a VAT repayment claim.
The Upper Tribunal of the Tax and Chancery Chamber yesterday ruled in favour of HMRC's appeal, overturning a decision made by the First-tier Tribunal to award Sportech £93m in March last year.
The sum was awarded in compensation for the operator overpaying value added tax between 1996 and 1979 on a ‘spot the ball’ game, which Sportech claimed it was paying in error.
Sportech had first made the claim in 2009, seeking £40m in repayment, with interest on the amount seeing the sum increased to the £93m figure pauid by HMRC in June this year.
HMRC unsuccessfully appealed the claim that same month, though a second attempt to make an appeal to the Upper Tribunal was subsequently granted.
As a result of the authority’s successful appeal, Sportech is now required to repay the money, with the gain recognised in the company’s 2014 interim financial statements to be reversed.
Sportech has been given until October 15th to decide whether to seek permission to appeal, and will update shareholders once it reaches a final decision.
The successful appeal sees the case drag on after the 2009 claim was rejected by HMRC in December 2010. The company then appealed the decision before the First Tier Tax Tribunal.