Font Size

HM Revenue and Customs Brief 11/10


HM Revenue and Customs -Tax Authorities

Tax Articles
Submit Articles   Back to Articles

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 gaming machines.

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 VAT).

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 successful.

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.

Further information

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

© Crown Copyright 2010.

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 under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.

Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2010-06-14 12:01:34 in Tax Articles

All Articles

Copyright © 2004-2021 Scopulus Limited. All rights reserved.