London’s Hippodrome Casino loses VAT case

The casino argued that food and drink should be treated as non-taxable supplies.
The casino argued that food and drink should be treated as non-taxable supplies.

The British tax authorities have won their appeal against a £447k refund.

UK.- London’s Hippodrome Casino has had its previous tax victory against His Majesty’s Revenue and Customs (HMRC) quashed by the Upper Tribunal Tax and Chancery decision. The land-based gambling venue had won a case at the First Tier Tribunal over a £447k tax bill related to food and drink provided to customers.

The First Tier Tribunal had sided with the Hippodrome Casino in its attempt to treat free food and drink given to gamblers as non-taxable supplies for the gambling business. It had concluded that the casino’s method for apportioning and recovering input VAT on overhead expenditure by reference to floorspace more accurately reflected the economic use of that expenditure than the standard turnover-based method of recovery provided under Regulation 101 of the VAT Regulations 1995.

The tribunal had decided that the floorspace method provided a more fair, reasonable and
precise proxy of the economic use of residual costs than the standard method. However, the Upper Tribunal has ruled that the decision was “based upon a material error of law”. It says that the method proposed by the Hippodrome was flawed due to the dual use of space for both food and gambling.

Last year, the gambling harm reduction business EPIC Risk Management entered into a two-year deal to work on-site at The Hippodrome Casino. The deal follows a pilot programme and a showcase event at the London casino.

EPIC will provide training to licenced and unlicensed customer-facing staff through 20 workshops and four focus group evaluation sessions on best practice, identifying risk and harm in player activity, vulnerability, stigma, meaningful interactions and increasing confidence. The Hippodrome’s staff will be trained to apply knowledge in real-world scenarios, while evaluation sessions will assess staff learning at the end of the course.

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