Background
Early yesterday (22 May 2008), Rank issued a Press Release stating that the VAT and Duties Tribunal had allowed its appeal in respect of the VAT treatment of interval bingo.
The issue within the appeal was whether, in subjecting bingo played under Section 14 of the Gaming Act 1968 to VAT, but allowing bingo played under Section 21 of the Gaming Act 1968 to be exempt from VAT, the UK had breached the principle of fiscal neutrality. Rank claimed that, whilst the UK could lawfully limit the scope of the exemption for betting, lotteries and other forms of gambling, it could do so only if it complied with that principle. Accordingly, Rank successfully argued that the UK failed to respect that principle by imposing VAT on Section 14 interval bingo and not Section 21 interval bingo, and because "betting, lotteries and other forms of gambling" fall within the VAT exemption in the EU Directives, that the VAT on Section 14 bingo had to be repaid by HMRC.
HMRC has until 10 July 2008 in which to lodge any appeal to the High Court.
Implications
Members who have accounted for VAT on interval bingo should consider (if they haven’t already) lodging a claim for recovery of that VAT from HMRC. Claims should be made promptly, as a strict three-year time limit applies to retrospective claims; although claims may also be made in respect of VAT accounted for prior to 4 December 1996, following the introduction of the transitional period for retrospective claims in the 2008 Budget. Additional claims for interest should also be considered
No decision has yet been made with regard to the slot machines element of Rank’s appeal.
