L&L runs online gambling websites in the UK and Europe and the dispute with HMRC centred around the calculation of remote gaming duty (RGD) under Part 3 Chapter 3 of the Finance Act 2014 (FA 2014).

The company paid cashback to any customers who lost all their stakes when gambling online and argued this should be tax deductible when calculating the profits of ordinary gaming under s157 of FA 2014 In the company’s view, these qualified as a prize under s160 of the FA14.

On 7 October 2021, HMRC contacted the appellant with a generic letter about its RGD, which is charged at a rate of 21%. Freeplays are treated as part of the profits and are taxable, although L&L did not consider its cashback bonus to be a freeplay.