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UK Gambling Machine Operators Set for Major Tax Refund as HMRC Rejects Opportunity to Appeal VAT Cas

The UK’s gambling machine owners and operators could be set for a significant tax refund following a decision by HM Revenue & Customs (HMRC) to forgo an appeal relating to a court case the tax authority lost earlier in June.

The case in question was won by Rank Group who successfully argued that it was unfairly charged value added tax (VAT) on some of its slots and gambling machine activity. The group operates bingo clubs and casinos throughout the UK including the Mecca Bingo chain and Grosvenor Casinos.

The group informed the court that the HMRC had applied VAT to gambling machines that were exempt from the tax from 2005 through 2013. Rank Group estimated that it had been overcharged by around £80 million during the period in question.

The court ruled in the group’s favour but the exact refund figure has yet to be confirmed by the tax authorities. However, the most significant development came this week as the HMRC has chosen not to lodge an appeal against the court ruling. The court had given the HMRC 56 days to lodge an appeal against its ruling and that time has now elapsed.

This opens the door for gambling machine operators to lodge similar complaints of overcharging which could see the HMRC pay out billions in VAT refunds over the coming years.

The tribunal was one of a series of tribunals initiated by Rank Group since 2008 but is certainly the most significant in terms of how it will affect the industry as a whole. The case also follows a similar ruling made in favour of Betfred in 2018. The company had alleged that it was overcharged VAT on its fixed odds terminals. The court’s decision was appealed by the HMRC with the decision upheld last year.

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