One-arm bandits hit jackpot over VAT

The Government faces embarrassing u-turn over VAT and gaming machines

Written by Barbara Buchanan

Accountancy Age, 22 May 2008

Bingo giant Rank Group has achieved a landmark VAT victory which could see the Treasury paying back hundreds of millions of pounds in claims.

The Mecca Bingo club owner has won £36.3m in repayments following a claim it submitted to the VAT and Duties Tribunal in 2006.

The VAT and Duties Tribunal ruled that charging the sector 17.5% VAT contravened the EU laws on fiscal neutrality – a decision which puts bingo gaming machines and one arm bandits on the same footing as casinos and betting shops.

‘This is a huge setback. If the decision stands hundreds of millions of pounds that the government thought it had collected will have to be paid back,’ said Paddy Behan, head of indirect tax services at Mercury Tax Group.

Rank said it was ‘pleased’ with the decision but expected ‘no material benefit this year’ if the government chose to appeal against the decision which it must do by 10th July.

A copy of the VAT and Duties Tribunal's judgement is expected to be made available shortly.