Mecca Bingo owners, Rank Group PLC (LON: RNK) announced this week that they will receive a refund of £77.5 million ($104.04 million) after reaching an agreement with Her Majesty's Revenue and Customs (HMRC) over value-added taxes paid on slot machine income in 2006-2013.
The refund ends a long-standing saga between London-listed Rank Group PLC (LON: RNK) after value-added tax (VAT) was wrongly applied to certain gaming machine revenue between 2006 and 2013.
The British tax authority decided not to appeal a decision handed down by the First-tier Tribunal regarding VAT paid on slot machine income in the period from April 2006 to January 2013 and the casino, slots and bingo operator will also receive compensation for interest lost, which is expected to amount to around £5.5million.
The introduction of the Gambling Act in 2005 saw VAT exemption for fixed-odds betting machines removed. However, VAT exemptions remained for casino, electronic roulette, and online betting terminals.
The VAT was challenged on the grounds of the erratic application of the exemptions and the European Union’s Court of Justice ruled in Rank’s favour.
HMRC Awash With Refunds
Betfred, owned by billionaire brothers Fred and Peter Done, has already been paid £97.7million, while William Hill has received £208.3million.
Entain, which operates approximately 3,000 Ladbrokes and Coral betting shops in the UK, has received £217.5million, while Flutter, the new owners of Tombola and owners of Paddy Power, has received £15.9million.
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