 Rank ruling could be a winner for slot machine and bingo operators
10 November 2011: PKF Accountants & business advisers welcomes the European Court of Justice (ECJ) ruling in favour of Rank Group PLC in its legal battle against HM Revenue & Customs (HMRC) over VAT refunds.
The leading accountancy practice sees today’s decision as a much needed boost for businesses in the entertainment industry.
The case centres on a long-running dispute over the VAT treatment of gaming machine and gambling receipts. Some claims, chiefly those covering the period from 2003 – 2005, have already been paid, but today’s decision could pave the way for hundreds of businesses to receive a second tranche of VAT refunds from the taxman, some from as far back as the mid 1970s.
Richard Wild, PKF’s Director of VAT, comments: “Although the case turned on some highly technical arguments, the basic position is that the taxman cannot treat two similar machines in a different way for VAT purposes as this breaches the basic rule of fiscal neutrality - even if machines fall under different licensing categories, as they can in the UK."
“While claims for periods between 1996 and 2003 and after 2005 are probably ruled out, today’s judgment could mean that substantial claims lodged for periods prior to 1996 will finally be paid. However, HMRC may yet seek to wheedle its way out of repaying these older claims to try to save cash, even though it has lost the argument on the main VAT principle involved."
“HMRC is unlikely to be in a rush to act on this ruling and will not immediately pay out further refunds worth millions of pounds. That said, I hope HMRC takes a sensible approach and will now finally admit defeat on this issue. Many businesses in this sector will be squeezed by the new Machine Gaming Duty, which will be introduced in 2013, so operators will appreciate their money back sooner rather than later.”
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For further information, please contact: Andy Konieczko, 020 7065 0537, andrew.konieczko@uk.pkf.com
Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Channel Islands) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited (PKFI) network of legally independent member firms. The PKFI member firms have around 2,200 partners and more than 21,000 staff in around 125 countries.
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