Taxman wins big on slot machine VAT

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Slot machineAnyone in business knows that once the VAT man sets his sights on you, he will not be deterred from squeezing what he wants out of you until the death – sometimes literally.

So pub operators and bingo halls know they are in for a fight as Her Majesty's Revenue and Customs target them for a clawback of £100m in rebates paid out over recent years on slot machine takings.

HMRC was given a boost after a ruling from the European Court of Justice clarifying the position on VAT covering slot machine and bingo takings. Now it seems the wheel has spun in their favour and they might be able to reclaim some of that money they've paid out.

Big players
Previously the position was foggy, leaving it claiming VAT from some gambling machines while unable to claim it from others. It meant the big players in the field, like Rank Group, JD Wetherspoon, Gala Coral and Whitbread argued successfully in British courts that the VAT man had breached European rules on 'fiscal neutrality' – by applying different rules to seemingly similar cases.

It all sounds extremely complex, and it is, but when you think that Rank Group alone has received £254m in rebates – that's money paid back to them by HMRC – then you can see why it's being pursued through the courts.

There's a lot at stake and in these times of empty public purses and struggling private enterprise, anything that HMRC can do to bring in a little extra cash becomes more important than ever. But in a strange way, even if the ultimate decision goes against the slot machine operators, there is still positive news for their balance sheets.

Because Rank Group's share price rose 13p to 150p yesterday simply because their VAT position had become clearer.

So even when they lose, they win.

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