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HMRC have published Revenue & Customs Brief (RCB 39/11 explaining their view of the impact of the European Court of Justice’s judgment in CRC v Rank Group plc.
Previous briefs, 75/09 and 11/10, provided advice about the litigation between the Revenue and Rank Group plc, considering the application of the principle of fiscal neutrality.
The company claimed the UK breached the principle in respect of the taxation of gaming machines prior to December 2005 (when the legislation was changed to ensure all gaming machine takings were subject to VAT) and its taxation of certain bingo participation fees, particularly in relation to mechanised cash bingo.
The European Court of Justice (ECJ) confirmed the findings of the UK courts, agreeing that similar supplies from the point of view of the consumer should be taxed in the same way and, when considering whether there has been a breach of fiscal neutrality. there is no need to apply a separate ‘competition’ test.
HMRC accept the issue is now resolved in respect of bingo; the department will withdraw the appeal in this respect. All valid claims received, further to RCB 75/09, have been paid, so the decision not to continue with litigation in respect of bingo means the taxman will not be seeking repayments.
With regard to gaming machines, the Revenue believe ECJ the judgment does not provide a final determination of the domestic litigation. Further consideration of the gaming machine appeals will have to take place, with the parties and the domestic courts using the judgment for guidance.
RCB 11/10 provided advice about claims relating to VAT accounted on gaming machine takings between November 1998 and December 2005; all valid claims have been paid.
The ECJ judgment does not extend the findings of the UK courts to any other period, meaning claims for periods prior to November 1998 and after December 2005 will not to be paid.
