HM Revenue and Customs Brief 63/08
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Issued 7 January 2009
VAT: The decisions of the VAT Tribunal in the cases of the Rank Group plc,
in respect of the supply of Mechanised Cash Bingo (MCB) and gaming machine
Bingo Duty: Implications of the decision for bingo duty.
This Brief concerns the VAT liability of MCB and gaming machine takings,
following the VAT Tribunal decisions in the cases involving the Rank Group.
In a decision dated 27 May 2008 the Tribunal decided that the VAT treatment
of MCB provided by Rank was in breach of fiscal neutrality and consequently
these supplies should be exempt from VAT.
In a further interim decision dated 19 August 2008, the Tribunal found that
there had been a prima facie breach of fiscal neutrality in the VAT treatment of
Rank's gaming machine takings and that these should have been treated as being
exempt from VAT before 6 December 2005, when UK law was changed to make all
gaming machine takings taxable. A second Tribunal hearing to hear further
aspects of this issue is to be held in October 2009.
HM Revenue & Customs (HMRC) has appealed against both decisions and the High
Court hearings are expected to be held in March or April 2009.
VAT: Our view of the law remains unchanged in that VAT is
and always has been properly due on supplies of MCB and on the takings of gaming
machines. Therefore, businesses should continue to account for VAT on such
VAT Tribunal decisions are only binding on the specific case heard, as it is
only the facts of that specific case that are considered in full. In line with
HMRC's normal policy, as we continue to maintain that our view of the law is
correct, no other businesses are affected by the decisions and therefore no
claims for alleged overpayments of VAT by other operators can be considered
until the conclusion of this litigation.
Bingo Duty: In order to protect our position in law,
'protective assessments' of bingo duty will be raised to safeguard revenue.
These assessments will be issued to reflect the fact that if there is no VAT to
deduct from bingo receipts, then additional bingo duty is due These assessments
will not be enforced unless HMRC loses on the substantive VAT liability issue.
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Article Published/Sorted/Amended on Scopulus 2009-01-13 23:22:56 in Tax Articles