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Online gambling group overpaid VAT
6/1/10 - The UK online and land gambling group Rank plc is cash flush this week after receiving a massive Value Added Tax refund from HM Revenues and Customs of GBP 42.5 million.
The repayment includes GBP 16.1 million that Rank overpaid in VAT on games of main stage bingo between 2004 and 2009, and follows successive First-Tier Tribunal tax chamber rulings in Rank’s favour, and the High Court.
It is additionally made up of GBP 26.4 million in overpaid VAT for amusement machines between 2002 and 2005.
Management at Rank has cautioned that Revenue and Customs has appealed the rulings, taking the issue to the European Court of Justice, where it is expected to be heard sometime in 2011.
If this appeal is successful, the group may be required to return the money with interest.
“The claims concern the inconsistent application of VAT to revenue from Rank’s businesses, Mecca Bingo and Grosvenor Casinos,” read a statement from the company this week
“It is Rank’s contention that this practice contravened the European Union principle of fiscal neutrality, which requires that supplies that are the same or similar should be not be treated differently for VAT purposes.
“This position was confirmed in the European Court Of Justice case Finanzamt versus Linneweber in 2005.
“In June of 2009, the High Court, confirming the decisions of the VAT and Duties Tribunal, now the First-Tier Tribunal’s tax chamber, accepted that HMRC had breached this principle and that therefore Rank’s claim should be accepted.”
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