Bingo Clubs to Repay VAT Refunds?

Bingo Clubs to Repay VAT Refunds?

Written by: ava carson on 14/11/2011 14:00
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The dispute between the bingo industry and UK Revenue and Customs over VAT on bingo games has runs its course but there may be some bad news for bingo operators.

On Thursday, the decision was revealed in support of land based bingo operators over VAT related to bingo games. Many operators have previously received large rebates on VAT. Here comes the bad news. VAT rebates on gaming machines may now have to be paid back to Revenue and Customs. Revenue and Customs is expected to recover in excess of £100m it has refunded plus interest.

Revenue & Customs required some clarifications from Europe after the British court’s decision to force rebate payouts to firms such as Rank Group, JD Wetherspoon, Gala Coral and Whitbread. Rebates were granted on the premise that UK VAT had been unfairly applied only to certain classes of gaming machines. The argument swirled around a possible breach of European regulations on "fiscal neutrality".

Revenue and Customs stated: "We are studying the judgment and will issue further advice once the potential implications have been identified."

While the situation over gaming machines remains unclear at this time, the decision in relation to bingo games has favoured operators who have previously received rebates. Rank, the owner of Mecca Bingo, initiated the claim against Revenue and Customs and has reportedly received refunds to the tune of £254m. It is unknown how much Rank will be awarded but after receiving some rebates there were reports that they took out an insurance policy. The policy would cover the cost of the refund repayment should they lose the appeal bought by Revenue and Customs.

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