review by HMRC. The final position for most bingo operators is therefore not likely to be decided for some time yet.
Practical Implications for Bingo Operators in the Interim Following Rank’s success in the UK courts HMRC are obliged, and have agreed, to pay a number of the existing claims made by taxpayers in relation to overpaid VAT on both bingo and slots.
It is important to note that in doing so, HMRC are not acknowledging that they accept the principal behind Rank’s claims, simply that (as case law currently stands) they are obliged to make the repayment and that they are complying with their legal obligations.
Nevertheless, the repayments are good news and all taxpayers with outstanding claims should consider requesting the repayments now. However, taxpayers should remember when agreeing to accept repayments for these claims that the litigation is ongoing. This means that, should HMRC be ultimately successful at the ECJ, then bingo operators who have accepted repayments from HMRC will be required to repay the amounts received, plus interest currently at a rate of 3%. This could mean that an operator will be required to repay to HMRC more than they receive. Whether to accept the repayment at this stage, prior to the final decision in the case, is therefore a commercial decision which should be considered carefully.
Further Opportunities: Bingo
It is still possible to submit claims for amounts incorrectly treated as VAT on bingo receipts for periods ended in the last four years, up to and including those covering the change in VAT treatment of Bingo on 27 April 2009, when all bingo moved from being taxable to exempt. Therefore, bingo operators should consider submitting claims for these periods if they have not already done so. Any Bingo VAT claims are likely to result in some additional Bingo Duty being due.
Slots
There is also an opportunity to recover the VAT incorrectly accounted for on gaming machines, relating to current periods; going back for all periods ended in the last 4 years.
The legal basis behind these new
slots claims is different from that for pre December 2005 claims, as is explained below.
The Rank slots case is concerned with VAT incorrectly accounted for on gaming machine income prior to 5 December 2005. The date is relevant as HMRC changed the law at that point changing the VAT definition of ‘gaming machines’. However, Deloitte think that the current definition of ‘gaming machines’ does not include all machines that gambling takes place on and the income from these machines remains exempt from VAT. If HMRC (or a court) agrees that the exempt machines are sufficiently similar to the VATable gaming machines there is still an opportunity to make claims for overpaid VAT in current periods.
General Points
For both Bingo and Slots, it is possible to make VAT claims going back up to four years from the end of the VAT period to which the claim relates. That is any VAT periods ending December 2006 are now out of time and the January 2007 period will be out of time at the end of January.
Therefore, to protect your position and any VAT you may have overpaid, it is vital to submit claims as soon as possible.
Changes to the taxation of Slots - Gross Profit Tax
On 9 December 2010 HM Treasury (HMT) announced that it would be having a ‘short’ consultation on a new tax on Gross Profits called the Machine Games Duty (MGD) in January 2011, with the intention that MGD for gaming machines will come into effect a year after Finance Bill 2011 receives Royal Assent. This means that it is unlikely to take effect before July 2012.
The main points to note are: Amusement Machine Licence Duty
Bingo Life 5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36