Mecca Bingo triumph in tax row

Rank Group, which incorporates Mecca Bingo, have recently emerged a step closer to being due a VAT rebate in the region of £36 million, after legally challenging and conquering the tax authorities. They convinced the VAT and Duties Tribunal that  the exercise of imposing VAT on Interval Games contravened European law, arguing that the fact that tax was applied to only some interval bingo games and not to others was in infringement of 'European principles' which dictate that tax authorities must deal with services of a similar or equal nature consistently.

The verdict will no doubt pave the way for other bingo operators to follow suit, which in turn could boost the bingo industry to the tune of £100 million.
If the HMRC decide to lobby the decision it must do so by 10th July. No comment was offered immediately after the initial ruling but it is broadly expected that they will launch an appeal.

In May, the government had confirmed its refusal to act upon to calls from the UK bingo industry to eliminate VAT on bingo charges altogether, and in answer to the online campaign launched by the Bingo Association against VAT on bingo, ministers announced that they had decided against bringing charges inline with casino’s and betting shops, stating that “tax is not at the root of the bingo industry's problems and we do not believe there is a tax solution.”

Despite being deemed the softest means of gambling this refusal ensured that bingo remains the sole mainstream gambling product that is doubly taxed, by VAT and additionally gross profits taxation. 

Also in May, the Minister of the Culture Dept which is responsible for gambling implied that he was contemplating increasing the number of £500+ jackpot machines that bingo halls can legally run in order to assist the ailing bingo industry, it was also announced that the government would increase the tax misery for bingo halls by increasing the rate of amusement machine license duty (AMLD).  No such restrictions in an online bingo game!

3rd June 2008