HM Revenue and Customs Brief 33/11
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Issued on 30 August 2011
HMRC position following the Tribunal decision in Dransfield
This brief updates Revenue & Customs Brief 01/11 and
explains HM Revenue & Customs (HMRC's) position following the
First-Tier Tribunal decision in Dransfield Novelty Company Limited and
others (Appeal number: MAN/08/0811).
The Tribunal found against HMRC in part and concluded that for
some of the period in question certain electronic lottery terminals did
not constitute amusement machines for the purposes of Amusement Machine
Licence Duty (AMLD). HMRC are not appealing this decision.
Dransfield Novelty Company is a supplier of machines described
as electronic lottery terminals to a number of small members clubs and
societies. The machines in question contained an electronic 'virtual'
stack of lottery tickets. The electronic stack contained winning and
losing tickets. When a coin was placed in the machine and the start
button pressed, the machine accessed the next 'ticket' in the stack.
The machine did not produce a paper ticket but rather activated an
electronic display of spinning fruit wheels which, on ceasing to rotate
indicated the winning or losing status of the 'ticket'.
Over the period considered by the Tribunal the definition of
'amusement machine' was subject to technical amendment on three
occasions. Notwithstanding these changes it was HMRC's contention that
the machines met the definition of an amusement machine throughout the
period in question.
The Tribunal was required to decide whether these electronic
lottery terminals were amusement machines for the purposes of the
Betting and Gaming Duties Act 1981, and as such were properly
licensable for amusement machine licence duty purposes. If they were
licensable then AMLD would be due and payable.
2. Tribunal decision
The Tribunal considered the liability of the machines against
the definition of an amusement over four periods which reflected the
three changes to the definition of amusement machine.
Period 1 ended on 18 July 2006.
Period 2 ran from 19 July 2006 to 31 October 2006.
Period 3 ran from 1 November 2006 to 20 July 2009.
Period 4 commenced 21 July 2009 and continues.
The Tribunal found that for periods 1, 2 and 4 the machines
did not meet the relevant definition. They concluded that for period 3
the machines were gaming machines and therefore amusement machines
subject to AMLD.
3. HMRC position
Whilst HMRC does not agree with the Tribunal finding in
relation to periods 1, 2 and 4, they will accept it.
Subject to the normal rules on capping and unjust enrichment,
HMRC will consider claims for repayment of AMLD in relation to
electronic lottery machines of the type considered by the Tribunal for
those periods where they were judged to fall outside the definition of
an amusement machine for AMLD, that is, periods 1, 2 and 4. This type
of machine will not require an amusement machine licence for any period
commencing on or after 21 July 2009. Any repayment in respect of a
licence spanning a licensable and non-licensable period will be
calculated by reference to the number of days when a licence was not
Claims will not be accepted in respect of payments of duty
made more than four years before the claim is made.
No claims will be considered for period 3, and assessments
that have been raised for that period will be enforced.
4. Further information
If you wish to make a claim you should write to:
Wrexham Technology Park
Your claim should be accompanied by full supporting evidence
which will include, for example, details of the licence which is the
subject of the claim. If the subject of the claim is a current licence
you must send this with your claim.
About the Author
© Crown Copyright 2011.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2011-09-05 12:18:45 in Tax Articles