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HMRC have issued Revenue and Customs Brief 12 (2021): VAT treatment of gaming machines from 6 December 2005 to 31 January 2013. It sets out how customers with appeals related to the VAT treatment of gaming machines during this period can claim VAT refunds.

The policy paper follows the decision of the First Tier Tribunal (FTT) on 30 June 2021 in which two cases were heard together, The Rank Group PLC & 2016 G1 Limited [2021] TC8190The FTT found that the treatment of slots games played on certain machines as taxed, whilst other games played on machines and online were treated as exempt, was a breach of fiscal neutrality. The EU principle of fiscal neutrality precludes treating similar supplies of services, which are in competition with each other, differently for VAT purposes.

It confirms that businesses who appealed claiming that HMRC’s treatment of their gaming machine income as standard-rated was a breach of fiscal neutrality will have their appeals stood behind the Rank/2016 GI decision where they relate to the period from 6 December 2005 to 31 January 2013. The gaming machines to which this applies are those usually found in amusement arcades, clubs and other venues. From 1 February 2013, the introduction of Machine Games Duty meant these differing VAT treatments were no longer an issue.

Affected businesses must have already made valid Appeals to the tribunal and must have proper evidence to support their claims. They can either contact their Customer Compliance Manager or contact HMRC at:This email address is being protected from spambots. You need JavaScript enabled to view it., quoting ‘Gaming Machine Fiscal Neutrality claim 2005 to 2013’ in all communications. The brief sets out what information must be provided as part of the claim.

HMRC have advised that they will now pay valid claims made within the relevant deadline, after taking into account, where relevant, revised Partial exemption, Capital goods scheme calculations and VAT debts. Businesses are reminded that they must take reasonable care in calculating their claims or Penalties may be due and that the repayments and interest thereon are likely to be taxable in the year of receipt.

Rank Group PLC have included an estimate of the size of their own estimated refund in their preliminary annual results for the year to 30 June 2021 and it stands at around £80 million.

Useful guides on this topic

VAT treatment on fixed-odds betting terminals and gaming machines
Revenue & Customs Brief 5 (2020): VAT treatment on fixed-odds betting terminals (FOBTs) and gaming machines, explains HMRC’s position following the joint decision of the Upper Tribunal on 15 April 2020 of The Rank Group Ltd UT/2018/0149 and Done Brothers (Cash Betting) Ltd (and others) UT/2018/0150.

Penalties (VAT)
When do penalties apply for VAT? What penalties are charged and how can they be mitigated?

Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

Errors: VAT how to correct
How to correct VAT errors or mistakes. 

External link

Revenue and Customs Brief 12 (2021): VAT treatment of gaming machines from 6 December 2005 to 31 January 2013


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