Rank to receive £83m tax refund in machine VAT case

HMRC will pay back £77.5m plus interest in wrongly applied VAT.

UK.- Rank Group has announced that Her Majesty’s Revenue and Customs (HMRC) has confirmed it will repay the company £83m for value-added tax (VAT) that was wrongly charged on revenue from B2 gaming machines between 2006 and 2013. The refund comprises £77.5m in VAT payments plus interest. It will be subject to 19 per cent corporation tax.

The HMRC had already confirmed that it would not appeal against the verdict in August after the First-tier Tribunal Tax Chamber (FTT) ruled in agreement with a European Union Court of Justice decision in favour of Rank.

The company, along with Betfred, had taken the matter to the European court arguing that HMRC had been erratic in its application of exemptions to VAT.

The 2005 Gambling Act removed a VAT exemption for fixed-odds betting machines but left exemptions in place for casino, electronic roulette and online betting terminals.

Rank initially claimed for VAT charged between 2002 and 2005 while Betfred’s claim dealt with the period from 2005 to 2013, which Rank will now also receive a refund on.

William Hill and Entain are also expecting to receive refunds of £230.3m and £200m respectively.

Rank, which owns the Grosvenor Casino and Mecca Bingo brands, has announced that it expects to report annual growth of 69 per cent for the first quarter of its financial year.

It said in a trading update that it expected to report growth across all areas, with revenue for the three months ending September 30 to hit £163.1m.

See also: John O’Reilly calls for UK gambling review to “rewrite historical flaws”