The UK tax authorities, HM Revenue and Customs, has concluded that it will not appeal against a tribunal ruling involving casino operator Rank Group over value added tax on slot machines.
The casino operator noted that the first-tier tribunal had agreed a 60-day extension to allow HMRC and Rank to agree the exact size of the claim, which the company still values at £80m.
Concerning VAT paid on slot machine income in the period of April 2006 to January 2013, the decision was handed down by the first-tier Tribunal on June 30, 2021.
Pubs, arcades and betting firms are set to receive billions in tax refunds after they were unfairly charged VAT by the government on some of their gambling machines.
Earlier this year, The Times reported that up to 1,000 UK businesses that operated fruit machines, one-armed bandits and coin-pushers were reviewing whether to claim compensation from HMRC due to overruled calculations on FOBTs charges.
The dispute relates to HMRC collecting VAT charges on gaming machines from 2005-to-2013. The long-running issue had been challenged by Betfred and Rank Group Plc who claimed that HMRC had broken its ‘fiscal neutrality rules’ by imposing a VAT-specific charge on land-based FOBTs, whilst no similar charges were applied to traditional and online casino games.
In April last year, an Upper Tribunal review led by Justice Mann and Judge Thomas Scott sided with bookmakers, ruling that HMRC had never applied a ‘clear distinction on the supply of games defined as FOBTs – a factor that should have allowed businesses to claim VAT exemptions under the ‘1994 Value Added Tax Act’.
Following the judgement, which HMRC could no longer appeal, William Hill and Entain’s Ladbrokes Coral unit declared that they would examine tax rebates totalling over £350m – as media speculated that HMRC industry payout would total plus £1bn.
Publishing its 2020 corporate accounts, Betfred – the Done family-owned betting business – reported that it had secured an ‘exceptional credit charge’ of £99 million from its VAT appeal.