Two divisions of Ticket Regale Website Viagogo have been hit with a £15m tax bill after they were found to have overpaid.
Corporate filters for VGL services and VGL services, both part of the US-Centered Group that include “Transfer to HMRC” accounting costs
Transfer pricing refers to the process by which separate entities within a larger corporate group have one for the services or goods they provide to each other.
Any such transactions must take place at market rates. Tax authorities know when companies have depressed prices artificially in order to move money from a taxable place to a taxable place.
The accounts do not go into detail with HMRC about Viagogo’s tax activities and there is no suggestion that the company deliberately sought to evade or evade tax.
The UK businesses did not sell tickets directly but both provided group companies at the time in question, according to technology and customer service accounts.
The £15m equal amount allocated to the two companies, both registered at an address in London, includes tax payments, if they have tax payments.
In their filings, the businesses said they believed HMRC’s findings resulted in “double taxation”, which is when a business is taxed on the same activity in two different jurisdictions.
The Firms said they are now changing their transfer policy but will also seek “remediation” under the UK tax treaty, which could result in a future financial benefit.
The companies already paid a combined £5.5m earlier this year, but said the “timing of further payments and settlements remains unclear”.
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Viagogo is under intense scrutiny as the government moves towards a “second ticket” review, which is expected to result in a cap on platforms.
Any such policy in one of its most important markets could face a blow to Viagogo, whose parent company is holding $8.6bn (£6.5bn), which comes from a loss of $6.6bn.
Stubhub’s holdings are separated from Stubhub International, which includes the UK Brand of the same name. The competition and markets authority forced the two businesses to separate to ensure continued competition in the UK, after Viagogo and Stubhub agreed to a merger.
Viagogo did not return a request for comment.