Gaming Machines- VAT Reclaim
10 August 2010
There has been considerable interest over many months and years in the VAT treatment of gaming machines. This followed on from a German case, �Linnewebber�, which has had ramifications for the UK.
Basically there was a disparity of treatment between casino sited machines and others. This resulted in what is termed a �breach of fiscal neutrality�, in other words it was not fair! The most recent case relating to the matter involved the Rank organisation. In this case Rank, who operate gaming machines, claimed that Fixed Odds Betting Terminals were similar to and in competition with their machines. The FOBTs were however treated as exempt from VAT. Rank therefore sought to recover output tax they had previously accounted for on the basis of unfair competition caused by the VAT rules. Following lengthy procedures and appeals the Tribunal and the High Court found in favour of Rank. From 5th December 2005 the law was changed to bring FOTBs into line with other gaming machines. Her Majesty�s Revenue & Customs are now reviewing claims previously submitted for the period 1st November 1998 and 5th December 2005. It is not possible to make a claim at this stage and indeed previously rejected claims will not be reviewed unless an appeal was lodged. In addition because HMRC intend to appeal the decision, they will issue �protective� assessments to safeguard future recovery of the VAT should they win. The matter is still being discussed in the trade, however if you did not previously submit a claim then the matter is now out of time as the law changed in 2005 and we now have a four year time bar.