Rank Group VAT Refund

Rank Group secured a VAT refund of more than £80 million on slot machine takings. The VAT claim, which Rank took to the First-tier Tribunal Tax Chamber in May last year, relates to machine income collected by Rank from April 2006 to January 2013. Rank said that interest was also due on the claim, expected to amount to £5.5 million.

Rank said that the issue was “whether certain amusement machines were similar to fixed-odds betting terminals and online games, which were exempt from VAT during the period”. However, when the act first came into force, the VAT exemption for fixed-odds betting terminals was removed yet remained in place for similar casino machines. Nevertheless, the Grosvenor Casinos and Mecca Bingo operator said that it had reached an agreement with HM Revenue & Customs on a rebate of £77.5 million, which it expects to receive shortly.

Before the 2005 Gambling Act, the machines were not subject to VAT as they were liable to pay gambling duty.

Rank successfully challenged the imposition of VAT based on the inconsistency of the exemptions, resulting in the European Union’s Court of Justice ruling in favour of the gambling operator.

Rank, which made its name as a film producer, is majority-owned by Quek Leng Chan, 79, the Malaysian billionaire tycoon. It has 52 Grosvenor Casinos, 72 Mecca Bingo halls and ten Enracha venues, plus digital operations. HMRC announced in August that it had decided not to appeal against the tribunal’s decision. However, both amounts will be subject to corporation tax.

Summarised www.sba.tax

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