Like something out of a Sylvester Stallone Rocky film, the underdog in the shape of Rank’s Mecca Bingo has come back from being on the ropes in a High Court Case regarding overpayment of VAT to appear as if there is a fighting chance of actually defeating the opposition. So, in the red corner we have Mecca Bingo and in the blue corner the Heavyweight champion ‘VAT Man’. It isn’t often the HM Revenue and Customs (HMRC) looks like it is going to receive a bloody nose but in the recent Rank / Mecca Bingo High court case, that is in fact what appears to have happened.
Court ruling could open up £500m floodgates
In a report featured on the BBC News site yesterday it states that Rank / Mecca Bingo have had the court rule in their favour to say that they have overpaid £62 million in tax paid on some slot machine and Mecca Bingo games income, and that this overpayment must be refunded. The success of the recent case could eventually cost the taxman up to a whopping £500 million, as there are in excess of one thousand similar cases waiting to be heard. The overpayment appears to be the result of an anomaly in the VAT rules that taxed some machines and bingo games but not other similar games, which the EU considers illegal as the EU rules “require the same or similar services to be treated in the same way for the purposes of VAT”. The HMRC changed the rules in 2005 to tax all games the same so these overpayments pre-date the new taxation rules.
Time for Tax parity for bingo halls too!
It is expected that the HM Revenue and Customs will appeal the Rank / Mecca Bingo ruling but as yet they are considering their position. Should the HMRC decide not to appeal then it is expected that there will be a flood of claims from pubs, arcade operators, bookmakers, motorway services, holiday camps and of course bingo halls . A victory for Rank and Mecca Bingo and other high street bingo halls seems only fair in the wake of the higher rate of tax recently set by the Treasury. It is hoped that the bingo halls including Mecca Bingo can now build on this small victory by having (by popular demand) the unbalanced 22% Tax rate overturned, if not this could indeed be a very ‘Rocky’ road for bingo halls up and down the country.