Rank Applies for Further £16 million VAT Repayment11th December 2009 8:59 am GMT
Rank Group plc has submitted a further claim for overpaid VAT on bingo for periods after July 2004, after HM Revenue & Customs (HMRC) confirmed Thursday that VAT claims on main stage bingo, the traditional format of bingo played in licensed bingo clubs, would be treated in the same way as those relating to interval bingo.
If successful, Rank estimates that the net cash benefit arising from this claim will amount to approximately £16 million before interest.
Earlier this year HMRC confirmed that participation fees for playing mechanised cash bingo (MCB) should have been exempt from VAT, after the UK High Court agreed with the VAT Tribunal that there had been a breach of fiscal neutrality in the VAT treatment of interval bingo.
Since then, HMRC has received representations that the High Court judgement applied more widely to other forms of bingo played under the same sections of the Gaming Act as MCB. Having considered this carefully, HMRC has now accepted that the judgement has a wider application to other forms of bingo participation games, with claims for VAT now being considered.
Following last year's rulings by the VAT & Duties Tribunal, Rank was awarded £59.1 million from HMRC in respect of VAT paid on interval bingo between 2003 and 2008.
HMRC confirmed that the Court of Appeal is due to hear its appeal in April 2010, and warned that should it be successful in the case, any repayments would have to be repaid including interest.
Shares in Rank Group plc (Co. Profile) (LSE:RNK) are currently trading at 79.90 pence per share in London this morning.