HM Revenue and Customs Brief 11/10
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Issued 16 March 2010
VAT: The decision of the VAT Tribunal in respect of Rank (gaming machines)
issued December 2009
Revenue & Customs Brief 40/09 issued on 14 July 2009 advised of a High Court
decision in the case of Rank, confirming there had been a breach of fiscal
neutrality in the tax treatment of the supply of Mechanised Cash Bingo (MCB) and
In respect of gaming machines, as the judgment related to an appeal against
an interim ruling of the VAT Tribunal, we advised that no claims for output tax
wrongly accounted for would be considered until the Tribunal issued a final
ruling in respect of Rank.
The First Tier Tribunal issued this in December 2009, finding that Fixed Odds
Betting Terminals (FOBTs) were similar to, and in competition with, taxable
gaming machines. We are appealing against this decision to the Upper Tribunal.
Additionally, the Court of Appeal is due to hear the appeal against the earlier
findings of both the VAT Tribunal and the High Court.
We intend, on the basis of the findings of both the VAT Tribunal and the High
Court (and subject to the appeals), to consider those claims already received in
respect of VAT paid on gaming machine takings.
Rank, which operates gaming machines, claimed there was inconsistency in the
way VAT was applied to these, as compared with certain comparator machines and
FOBTs which were exempt from VAT.
In 2008, the VAT Tribunal ruled there had been a breach of fiscal neutrality
as a result of the difference in treatment. This ruling was upheld by the High
Court last year although this itself is subject to a further appeal. The
principle of fiscal neutrality requires similar supplies to be treated the same
for tax purposes to avoid any distortion of competition.
The law was changed from 5 December 2005 and from that date the treatment of
comparator machines, FOBTs and gaming machines has been the same (and subject to
Implications of this judgment
As FOBTs came into commercial use in the United Kingdom in November 1998,
this date agreed by the Tribunal, we will now consider existing claims submitted
within required time limits for repayment of VAT paid on gaming machine takings
for the period from 1 November 1998 to 5 December 2005.
Claims that have previously been rejected (for whatever reason) and which are
not under appeal will not be considered. No new claims for the repayment of VAT
paid for the period between 1 November 1998 and 5 December 2005 can be made.
The aim is to process all existing claims, where satisfactory evidence to
support the claim has been provided, by 31 March 2011.
Making claims or adjustments
Where a business has already made a claim to us for output tax wrongly
accounted for in respect of gaming machines, this will be considered although
further evidence may be requested.
All claims will be subject to the time limit in section 80(4) of the VAT Act
1994 – three years where the claim was made before 1 April 2009 or, where the
claim was made on or after that date, four years or back to accounting periods
ending on or after 1 April 2006 whichever is the shorter.
Protective assessments will also be issued under section 80(4A) of the VAT
Act 1994 in order to allow us to recover any payments made should any appeals be
There may be direct tax implications where amounts of over-declared output
tax are repaid to businesses and your attention is drawn to Revenue & Customs
Brief 14/09 issued previously.
We may reject all or part of a claim if repayment would unjustly enrich the
claimant. More details on ‘unjust enrichment’ can be found at part 14 of VAT
Notice 700/45 How to correct VAT errors and make adjustments or claims.
Where you are in any doubt about the correct treatment please contact the
Helpline on 0845 010 9000.
About the Author
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Article Published/Sorted/Amended on Scopulus 2010-06-14 12:01:34 in Tax Articles