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Rank Group has claimed its second success of the year in its attempts to reclaim VAT payments from HMRC.
The gambling giant is owed millions that were incorrectly levied on earnings made via gaming machines, according to the latest decision by the VAT and Duties Tribunal.
It ruled that from November 2003 (at least), the UK's VAT treatment of one-armed bandits was inconsistent with European Union rules concerning fiscal neutrality.
Rank's claim for repayment of over-declared VAT — which the company estimates to be as high as £25 million — was submitted to HMRC in 2005 and relates to the fact that, prior to December 2005, certain types of 'random number generator' gaming machine were exempt from VAT, while similar devices were subject to the tax.
The tribunal's ruling was an interim decision, and a second stage of the litigation is due to be listed for later this year.
The tribunal indicated that there is a strong likelihood that the case will be referred to the European Court of Justice. As such, it is unlikely that there will be any material benefit to Rank in the current year.
HMRC would not comment on the latest decision.
Earlier this year, the VAT and Duties Tribunal found in favour of Rank, owner of the Mecca Bingo and Grosvenor Casino chains, in a case concerning interval bingo — smaller games played in licensed bingo clubs during breaks in the main session.
