The First Tier Tribunal has issued its decision in relation to the long running dispute over the VAT liability of gaming machine income. 

The case relates to the refusal by HMRC to pay a repayment claim in respect of VAT paid between 1st October 2002 and 5th December 2005 and whether HMRC were right to tax differently the same type of machines sited at different premises (being VAT exempt in casinos and subject to VAT elsewhere, such as amusement arcades).

The subject of a number of hearings, the Tribunal has now allowed Rank’s appeal stating that the UK was in breach of the principle of fiscal neutrality for all of the above period. This means that Rank is entitled to a refund of £29 million. 

It also means that the significant number of similar cases stood over awaiting this decision should be entitled to refunds. 

We await HMRC’s response to this decision – they have until mid February to submit an application to make a further appeal. 

In the meantime, if you have outstanding claims or think that this case may have implications for you please contact us.