Max Schofield in Remote Gaming Duty Case


Max Schofield appeared on behalf of the taxpayer, L&L Europe Ltd, in its successful appeal before the First Tier Tax Tribunal. The issue concerned the treatment of “cashback” payments to players for the purpose of Remote Gaming Duty. The decision is available here.

L&L Europe Ltd operates online casinos on various website platforms and is registered with the UK Gaming Commission. Players who are registered with L&L Europe’s casinos are eligible to receive cashback on certain games, whereby 10% of any payments that have been lost in the course of gaming is returned to the respective players. The cashback, once activated, is credited to a player’s online wallet in the same way as winnings, and can be withdrawn to a personal bank account as cash. 

HMRC formed the view that the cashback payments were not deductible for the purpose of Remote Gaming Duty on profits as they had not been “won” as prizes under the Finance Act 2014. 

In the decision by Judge Amanda Brown KC, the Tribunal agreed with the taxpayer’s arguments on the proper construction of the legislation: the cashback did qualify as expenditure on prizes as payments from a potential outcome in a game of chance, alternatively the cashback would be deemed to be a prize as a partial return of the gaming payment under s.160(3) of the Finance Act 2014. 

This is one of very few occasions where the Tax Tribunal has addressed the Remote Gaming Duty legislation. The decision provides welcome clarity for taxpayers in this sector, ensuring the law aligns with the economic reality of online casinos’ profits. 

Max was led by Valentina Sloane KC of Monckton Chambers and instructed by Leigh Mallon and Natalia Gofman of Steptoe International UK LLP.

Back to News

Additional Information