Rank receives £42.5 million refund

In the UK, gambling giant Rank Group has announced that it has received a refund of £42.5 million in overpaid value-added tax (VAT) from Her Majesty’s Revenue And Customs (HMRC).

The Maidenhead-based firm announced in December that it expected to receive the refund and stated that this repayment includes £16.1 million it overpaid in VAT on games of main stage bingo between 2004 and 2009.

The refund follows successive rulings in Rank’s favour from the First-Tier Tribunal’s tax chamber, which was formerly known as the VAT And Duties Tribunal, and the High Court and also includes £26.4 million it overpaid for amusement machines between 2002 and 2005.

Rank revealed that HMRC has appealed these rulings, which will now be considered by the European Court Of Justice, with an expected hearing date sometime in 2011. If the Government is successful, Rank could be required to return its payment with interest.

“The claims concern the inconsistent application of VAT to revenue from Rank’s businesses, Mecca Bingo and Grosvenor Casinos,” read a statement from the British firm.

“It is Rank’s contention that this practice contravened the European Union principle of fiscal neutrality. The European Union’s principle of fiscal neutrality requires that supplies that are the same or similar should be not be treated differently for VAT purposes. This position was confirmed in the European Court Of Justice case Finanzamt versus Linneweber in 2005. In June of 2009, the High Court, confirming the decisions of the VAT And Duties Tribunal, now the First-Tier Tribunal’s tax chamber, accepted that HMRC had breached this principle and that therefore Rank’s claim should be accepted.”