Why gambling firms could claim back hundreds of millions of pounds from the public purse

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A tax tribunal has ruled that two companies were wrongly charged VAT on betting terminals and Swansea East MP Carolyn Harris wants the Treasury to appeal

The Treasury should fight a court decision which could allow gambling and betting companies to reclaim huge sums of money in VAT, a Swansea MP has said.

Carolyn Harris, who campaigned for years against controversial fixed-odds betting terminals (FOBTs), said she was “bitterly disappointed” that Betfred and Rank Group had taken their case to a tax tribunal.

The tribunal, which hears appeals against Her Majesty’s Revenue and Customs (HMRC), said Betfred and casino operator Rank Group had been wrongly charged VAT on FOBTs and slot machines before 2013, when the law was changed.

An accountancy firm, RSM, said the decision could lead to similar claims from other gambling companies. It claimed the total figure repayable from the public purse could be £1.5bn plus interest.

Swansea East MP Mrs Harris, who played a big part in the reduction of FOBT stakes from £100 per play to £2 last year, said: “I sincerely hope that the Treasury challenges this decision, especially at this time when it needs every single penny it can get its hands on.”

She described problem gambling as “a public health issue as bad as drugs”, which affected the most vulnerable members of society.

The tribunal said VAT should not have applied to FOBTs and slot machines because of their similarity to VAT-exempt casino gambling devices like roulette wheels.

Mrs Harris said high street betting companies with FOBTs in their premises had previously been at pains to say how different they were to casinos.

In a statement, a Betfred spokesman said: “This is an historical tax case where the upper tribunal has agreed with the original court decision in July 2018 that licensed betting offices were wrongly charged VAT on fixed odds betting terminals between 2005 and 2013.”

A Rank Group spokesman said: “At the outset of the lockdown period, Rank requested repayment from HMRC in relation to VAT paid on slot machine revenue between 2002 and 2005.

“This related to a long-running VAT claim and repayment was received in early April.”

A spokeswoman for HMRC said: “HMRC is considering carefully the upper tribunal decisions before deciding on next steps.”


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