Leisure Industry Alert: HMRC to pursue overpaid VAT

The HMRC has stated its plan to pursue a variety of leisure facilities and operators for overpaid VAT payments. The statement was issued in a statement following a Court of Appeal decision concerning the Rank Group on 30 October 2013 relating to VAT on gaming machine takings. We wrote a piece on the new rules for gaming tax, which can be found here.

A spokesman for HMRC said: “The Court of Appeal agreed with HMRC’s arguments regarding the taxation of multi-terminal betting machines.’

This spokesman went to explain that these multi-terminal betting machines will now fall within the definition of ordinary gaming machines, and will be taxed in the same way.

Why does the gaming tax VAT rebate need to be repaid?

In 2009, a ruling led to hundreds of pub operators and licensees receiving tax rebates on overpaid VAT from the HMRC.

Therefore any operator who claimed a VAT rebate based upon this discrepancy will have to repay the money they received. If you are affected, you should have been informed when you applied for this VAT rebate that this could potentially happen. The decision to redefine this type of gaming machine and therefore make the VAT rebate void was based on an appeal launched by the HMRC. By winning this appeal the HMRC is entitled to request that the money is repaid.

What will happen now?

Expect to be contacted within the next few weeks by the HMRC is you are affected by this latest revelation. The letter will include guidance about how to repay the money and the total amount you are obliged to pay back. Once you have received this letter, if you cannot make the payment by the date due, you should contact HMRC.

To contact NDML about a personalised insurance quote for your leisure based establishment, contact us on 0844 488 9205 or use our contact form.

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