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A man who gave such successful racing tips he claims that he was barred by bookies, has won a VAT tribunal where he proved that £85,000 was receipts from winnings rather than income earned from making a supply.
Jeff Laughton set up a network of around 40 people through his company who placed bets using his money before passing any winnings back to him, to get around being barred from using bookmakers on the high street. People placed bets for him after he had his account closed by a number of firms because, he claims, of his successful bets.
He argued that people were pleased to help him out in return for being able to bet on the same horses he tipped to win, and there were therefore no ‘taxable supplies’ to punters. HMRC argued that by giving the names of favoured runners, Mr Laughton was providing information in return for payments equivalent to winnings.
A First-Tier Tribunal found that Mr Laughton was purely using others to place his bets and it was “immaterial” if they decided to use his tips for their own bets or not. It found that people placing bets for him ran no risks and would never be out-of-pocket in that it was always Mr Laughton who provided the stake money.
This meant that VAT totalling £85,000 that Mr Laughton had erroneously accounted for on his winnings, was repayable to him.
The Tribunal also ordered HMRC to allow Mr Laughton’s business, Victorangle Limited, to de -register from VAT.
The moral here is that it’s important not to make assumptions when it comes to VAT. Mr Laughton had assumed that VAT was due on his winnings. When he realises his mistake, he was able to correct it and to recoup £85,000 of overpaid VAT.
If you have any questions on VAT, or just want to share some ‘hot tips’ contact our VAT team today on 0845 177 5500 or using our online form