Mecca parent, Rank Receive Back £42.5 Million in Overpaid VAT

Rank who are the owners of Mecca Bingo and Grosvenor Casinos must be celebrating this week as it has been reported that they have won their case against HM Revenue and Customs (HMRC) regarding an over payment on their VAT.  This has lead to Rank being credited back with £42.5 million!  The repayment covers £26.4 million overpayment on VAT paid on their amusement machines and £16.1 million on VAT paid on their main stage bingo.

Rank received this payment back due to the fact that they challenged the HMRC in court on two different VAT payments.   Their first query was due to the fact that they had paid both bingo duty and VAT on money taken from their land based clubs which they said was double taxation.  The second disagreement was that they were charged VAT on their jackpot machines which Rank saw as a breach of fiscal neutrality as similar machines such as fixed odds betting machines were not subject to VAT until after 2005.

Tony McClenaghan who is the Senior Tax Partner for Deloitte who were advising Rank on the case said “This is a very welcome decision following on from earlier victories at the Tribunal and in the High Court. We have always been confident that there was a breach of fiscal neutrality in the differential treatment of the relevant gaming machines and we welcome the Tribunal’s confirmation of this fact. Taxpayers affected by this decision should now consider making claims for overpaid VAT”

The HMRC have appealed the rulings to the European Court of Justice which means if their appeal is successful that Rank would have to pay back the £42.5 million plus interest.  However the appeal is not thought to go into court again until 2011.  It will also be interesting to see if any other bingo companies will make any claims.