Rank Group wins £62m VAT appeal

Rank has won a High Court ruling today which entitles the group to a VAT refund from HM Revenue and Customs.

The case has centered around whether VAT was overpaid on games of interval bingo and certain gaming machines.

In handing down the ruling, the court stated that there was no objective justification for the differential in tax treatment by HMRC which breached the European Community principle of fiscal neutrality.

Tony McClenaghan, senior indirect tax partner at Deloitte, said the court's decision is unpinned by the principle of fiscal neutrality in Community law.

He said it remains unclear whether HMRC will appeal the decision.

'...the decision of both the VAT Tribunal and the High Court are clear and unequivocal and we would expect the Court of Appeal to share this view.

'The same principles should apply to any taxpayer which has paid VAT on the income from these activities. Other organisations in the leisure industry should consider their own grounds to submit claims for overpaid VAT and interest to HMRC following the guidance laid down by the High Court in this ruling,' he said.

A spokesman for HMRC said the department is studying the court’s decision in detail as there are important legal points to consider before deciding the next course of action.

'The High Court’s decision affects all suppliers of mechanised cash bingo and we will be issuing a HMRC brief shortly advising on how any overpaid VAT can be claimed,' he said.

Further Reading:

VAT rebate for Rank

Rank looking forward to £25m VAT reclaim