Rank Group is seeking a final settlement of £80m for overcharged VAT on B2 gaming machines.
UK.- Her Majesty’s Revenue and Customs (HMRC) has opted not to appeal against a ruling that it must repay millions of pounds in overcharged VAT on B2 gaming machine revenue.
Rank Group, the owner of Grosvenor Casinos and Mecca Bingo, has now agreed a 60-day extension to settle its VAT claim with the First-tier Tribunal Tax Chamber and expects a refund of around £80m.
The FTT last year upheld a European ruling on the application of VAT on B2 gaming machine revenue between 2005 and 2013.
Until 2005, B2 gaming machines, or fixed-odds betting terminals, were subject to gambling duty but not VAT. That exemption was removed when the 2005 Gambling Act came into force despite the fact that it remained in place for traditional, online and electronic roulette machines.
Rank, along with Betfred, challenged the inconsistency at the European Union’s Court of Justice. The European court ruled in their favour, and its decision was upheld by the FTT.
VAT on B2 gaming machines has since been replaced with a duty, which was initially charged at 20 per cent, and then 25 per cent from 2015.
The windfall will be very welcome after Rank reported a loss of £93m for 2020 due to lengthy Covid-19 lockdowns for land-based venues and a knock-on effect on omni-channel brands.
While the review is expected to largely concentrate on rules for online gaming, Rank called for an equal balance between the land-based and digital sectors to create a level playing field and safeguard UK consumers.Meanwhile Rank Group has named Eitan Boyd as its new chief innovation officer. Boyd is the former chief executive of the gaming operator Stride Gaming, which Rank acquired for £120m in 2019.