Viagogo Hit With £15 Million Tax Bill After HMRC Transfer-Pricing Inquiry
Two UK subsidiaries of the ticket-resale platform face a large tax settlement over internal service charges from 2016-18
Two United Kingdom-based divisions of the ticket-resale platform Viagogo — VGL Services and IFOT Services, both part of the U.S.-listed StubHub corporate group — have been issued a combined tax assessment of approximately £15 million after HM Revenue & Customs (HMRC) concluded that the firms under-paid tax in relation to “transfer-pricing” arrangements for the years 2016 through 2018.
The companies’ filings acknowledge the shortfall and state that they regard HMRC’s findings as causing “double taxation” — namely the same activity being taxed in more than one jurisdiction.
The firms say they have already paid £5.5 million earlier this year and have adjusted their transfer-pricing policies while seeking formal remediation via the United Kingdom’s treaty-based tax mechanisms.
Transfer pricing rules govern the prices set between related companies in a group (for example, one entity supplying services to another) and require those prices to reflect what independent parties would agree in comparable circumstances.
HMRC’s ruling indicates the way one or both of the subsidiaries charged for technology or customer-services support to other group companies did not satisfactorily reflect the “arm-length” principle.
Neither VGL Services nor IFOT Services directly sell tickets themselves; their role was to supply other group firms with services.
The disclosure notes that the division responsible for the shortfall is part of a complex global corporate structure in which the value of inter-company services has come under scrutiny.
The tax assessment coincides with wider pressure on Viagogo’s business model in the UK. The United Kingdom government is set to review the secondary-ticketing market and may introduce caps on resale prices.
Viagogo’s parent company, StubHub Holdings, floated on the U.S. Nasdaq in September with an initial valuation of about $8.6 billion but has since fallen, reflecting investor concern about regulatory and tax exposures.
The companies state they intend to engage HMRC’s mutual-agreement procedure under the UK’s tax treaties to seek relief from double taxation, but emphasise that the timing and financial effect of any settlement remain uncertain.
The case highlights the intensifying attention of HMRC on multinational groups’ internal transactions: in the tax year 2023-24 the agency recorded a yield of nearly £1.8 billion from transfer-pricing and diverted-profits-tax cases.
For Viagogo and its U.K. divisions, the outcome will test how the firm manages both tax-compliance risks and changing regulatory scrutiny in the ticket-resale arena.
The companies’ filings acknowledge the shortfall and state that they regard HMRC’s findings as causing “double taxation” — namely the same activity being taxed in more than one jurisdiction.
The firms say they have already paid £5.5 million earlier this year and have adjusted their transfer-pricing policies while seeking formal remediation via the United Kingdom’s treaty-based tax mechanisms.
Transfer pricing rules govern the prices set between related companies in a group (for example, one entity supplying services to another) and require those prices to reflect what independent parties would agree in comparable circumstances.
HMRC’s ruling indicates the way one or both of the subsidiaries charged for technology or customer-services support to other group companies did not satisfactorily reflect the “arm-length” principle.
Neither VGL Services nor IFOT Services directly sell tickets themselves; their role was to supply other group firms with services.
The disclosure notes that the division responsible for the shortfall is part of a complex global corporate structure in which the value of inter-company services has come under scrutiny.
The tax assessment coincides with wider pressure on Viagogo’s business model in the UK. The United Kingdom government is set to review the secondary-ticketing market and may introduce caps on resale prices.
Viagogo’s parent company, StubHub Holdings, floated on the U.S. Nasdaq in September with an initial valuation of about $8.6 billion but has since fallen, reflecting investor concern about regulatory and tax exposures.
The companies state they intend to engage HMRC’s mutual-agreement procedure under the UK’s tax treaties to seek relief from double taxation, but emphasise that the timing and financial effect of any settlement remain uncertain.
The case highlights the intensifying attention of HMRC on multinational groups’ internal transactions: in the tax year 2023-24 the agency recorded a yield of nearly £1.8 billion from transfer-pricing and diverted-profits-tax cases.
For Viagogo and its U.K. divisions, the outcome will test how the firm manages both tax-compliance risks and changing regulatory scrutiny in the ticket-resale arena.
