Rank Group plc (RG) have lost their case at the Court of Appeal (CoA) where they were trying to obtain a £67m refund of overpaid VAT. For many years, RG had treated the supply of mechanised and cash bingo as taxable and had charged its customers VAT on their gaming. In 2005 the EU Court of Justice (EUCJ) decided a case that confirmed the provision of gambling services were exempt. RG then made a claim for overpaid VAT in accordance with the UK legislation on refunds.
This legislation allowed historic claims going back to the inception of VAT in 1973 to early December 1996 to be made as long as the claims were made before 1 April 2009. RG duly submitted a claim for the periods to December 1996 and received a refund of £75m as the claim was in time. RG also submitted two other claims for periods that ended within the 4-year time limit for making claims. RG also submitted another claim for £67m relating to periods from December 1996 to the later periods. This claim was rejected by HMRC as being time barred. The time bar was only legislated for in 1996 and it was held by the EUCJ that a transition period should be used when limiting taxpayers’ access to refunds, hence the ability to make historic claims until 1 April 2009.
RG tried to argue that the amounts repaid by HMRC under the first three claims were incorrect and therefore the 4-year time limit ran for the date of the repayments as opposed the prescribed accounting periods. The CoA rejected this argument finding that RG were trying the stretch the meaning of the VAT legislation. Time barring had been held by the EUCJ to be fair and therefore HMRC were allowed to reject RG’s claim as being too late.
The decision can be found at: The Rank Group Plc v Revenue And Customs – Find case law (nationalarchives.gov.uk)
Please let us know if you have any questions surrounding VAT overpayments. We can help with arranging for repayment of overpayments. We can also help confirm what is exempt, outside of the scope, reduced or zero-rated and where the cut-off points lie. Making an error on these points can be costly.
