Rank to appeal after £31m tax ruling is overturned

Rank is set appeal to the Supreme Court after the Court of Appeal (CoA) overturned an earlier ruling which ordered the HM Revenue & Customs (HMRC) to pay the operator almost £31m in disputed VAT payments.

The case dates back to 2010 when Rank contested that HMRC wrongly applied different taxation rules to two similar gambling machines between 2002 and 2005. Following a 2011 ruling from the European Court of Justice (ECJ), HMRC was forced to reimburse Rank with £30.8m in overpaid taxes during the three-year period.

However, following an appeal by the HMRC, the CoA has now ruled that Rank must repay the monies in connection with the claim.

Rank has already successfully claimed on two counts of litigation regarding overpayment of tax in relation to similar types of mechanised cash bingo and slot machines totalling £275m.

This third strand, which involves traditional gaming machines and FOBTs, has proven more problematic. During the period in question, traditional gaming machines as operated by Rank were subject to VAT, whereas FOBTs were deemed tax exempt.

Rank was successful in the First-Tier Tribunal (FTT) of the ECJ, however, HMRC was given permission to appeal to the Upper Tribunal, which decided that the FTT had erred in the law by applying an incorrect test and failing to take into account the correct considerations when considering services offered to consumers.

Rank’s case is the lead in a number of claims seeking repayment of VAT levied on traditional gaming machines, which are collectively thought to be worth several hundreds of millions pounds to gaming operators.