UK Bookmakers Could Obtain Reimbursement From HMRC For FOBT VAT

After HM Revenue & Customs (HMRC) lost its longstanding dispute against Rank Group and Betfred, UK bookmakers could obtain reimbursement for previous tax charges against gambling machines.

A Upper Tribunal headed by Justice Anthony Mann and Judge Thomas Scott ruled last Friday in favour of betting companies which had previously challenged HMRC’s classification of VAT charges on Fixed Odds Betting Terminals (FOBTs).

Rank and Betfred had formerly questioned HMRC VAT charges on wagering FOBTs by stressing that tax exemptions were in line with the EU Lottery and Gambling Consumer Tax Policy ‘subject to the conditions and limitations laid down by each Member State.’

Following the EU ‘fiscal neutrality’ precedent, the Rank Party sought reimbursement for VAT gambling machine duties paid between 2002 and 2005, adding that exemption could be asserted against the provisions of the ‘1994 Value Added Tax Act’ of HMRC.

Similarly, Betfred had challenged charges for HMRC VAT on FOBTS from 2005 through 2013. The bookmaker claimed that HMRC had made no differentiation available via FOBTs in the ‘supply of games,’ and therefore could claim exemption on such casino games in accordance with the taxation policy of industry.

Despite their original disagreement with Rank Plc, until January 2013, HMRC did not amend its UK gambling VAT legislation to include FOBT provisions.

HMRC had previously lost two separate lawsuits against the bookmakers, who had secured appeals approved by the FTT court in the UK. Settling the challenge of HMRC, the United Kingdom Upper Tribunal had preferred to consider its separate appeals as one issue.

Betfred released the following statement about the decision of the Upper Tribunal: “This is a historical tax case where the Upper Tribunal has agreed with the original court decision in July 2018 that licensed betting offices were wrongly charged VAT on Fixed Odds Betting Terminals between 2005 and 2013 before the introduction of machine games duty.

“We will not be making any further comment as HMRC is still able to seek permission to have an appeal on the matter heard by the Court of Appeal.”