UK-based gambling company Rank Group and HMRC have reached an agreement in regards to its outstanding VAT refund claim on slot machine income.
Within its market update, the company revealed that HMRC will issue a refund of £77.5m paid machine duties paid from April 2006 to January 2013.
Rank’s statement read: “The refund has been agreed at £77.5m and should be received by the group shortly. Interest is also due on the claim, which Rank expects to be circa £5.5m. Both amounts will be subject to corporation tax at 19 per cent.”
In April 2020, an Upper Tribunal judgement voted in favour of Rank and Betfred’s claim against HMRC that had incorrectly imposed VAT-specific charges on land-based gaming machines.
The bookmakers’ ten-year appeal was settled as Upper Tribunal judges backed an original verdict that HMRC had failed to make a “clear distinction on the supply of games defined as FOBTS”.
This summer, Rank was granted a 60-day extension by the Tribunal Tax Chamber to resolve its final settlement with HMRC, with the company informing investors that it would pursue a minimum £80m repayment.
Proceeds of the refund will be used to strengthen Rank’s ongoing transformation programme and balance sheet, with the settlement to be included in the company’s next interim results published on January 27, 2022.
Following the judgement, William Hill issued a statement confirming that it would begin a “gaming machines VAT challenge – in which management pursues a ‘material net cash recovery of between £125-£150m’”.
Meanwhile, it is estimated that Entain’s Ladbrokes and Coral subsidiaries could reclaim a combined and £200m VAT repayment.