UK land-based operators eye VAT refunds over FOBT charges
Up to 1,000 businesses that operate slots and coin pushers are examining possible VAT refunds due to overcharging on FOBTs.
UK.- More bookmakers and hospitality businesses in the UK are looking into whether they may be in line for millions of pounds in VAT refunds from the government over VAT charged on gaming machines.
The Times has reported that up to 1,000 businesses that operated slots and coin-pushers are looking into whether to claim compensation from HMRC for overcharged VAT from 2005-to-2013.
Betfred, William Hill, Ladbrokes Coral and Rank Group Plc have already won challenges against HMRC by arguing that it had broken “fiscal neutrality rules” by imposing a VAT-specific charge on land-based fixed-odds betting terminals (FOBTs) despite imposing no similar charges on traditional casino games or online casino.
An Upper Tribunal review led by Justice Mann and Judge Thomas Scott took the side of bookmakers last May. It ruled that the HMRC had never applied a “clear distinction on the supply of games defined as FOBTs – a factor that should have allowed businesses to claim VAT exemptions under the ‘1994 Value Added Tax Act.”
William Hill and Entain’s Ladbrokes Coral promptly announced that they would lodge claims for tax rebates amounting to more than £350m. It’s been estimated that the industry could claim a total payout of more than £1bn.
The Done family’s Betfred gained £99m from its VAT appeal, allowing it to compensate for major declines in revenue caused by the closure of betting shops during Covid-19 lockdowns.
However, other operators are still analysing how to proceed, and whether to lodge claims, at a time when the UK government is looking at an overhaul of the 2005 Gambling Act.
