HMRC to Appeal Against Mecca Bingo VAT Rebate

Tagged as: Mecca Bingo | by Hollie Sanders

Her Majesty’s Revenue and Customs is to appeal against the decision made in May allowing Mecca Bingo ₤36.3 million in overpaid VAT. This decision was taken by the EU VAT Tribunal, but I can’t say that I am surprised that the Government is appealing against the decision. Even at the time it happened I expected this would occur. And so apparently were Mecca Bingo as they did say that they did not expect any benefit to their company from this decision during 2008.

The original appeal was made by Rank Group, on behalf of Mecca Bingo, a subsidiary, as far back as 2006. However it seems as though the High Court appeal will only take place in 2009, and this has seen a further drop in the share price of the Rank Group. All of this stems from the fact that suppliers of services that are similar in nature may not be subjected to different VAT practices. An bingo unfortunately is. They pay 17.5% VAT as well as Gross Profit Taxes, whereas other gambling activities only pay the 15% Gross Profit Tax. Online bingo is also not subjected to this extra VAT payment.

The laws that govern this, namely the EU fiscal neutrality, determined that the UK government had acted against this and hence awarded Mecca Bingo the right to have money paid back for interval bingo games. This adds up to a great deal of money, but the government is digging in tooth and nail regardless of the struggling state of the UK land based bingo industry.

One can only wonder and wait to see what happens, what I do know though, is if Mecca Bingo pulls this coup off, they will set a precedent for the entire land based bingo industry in the UK.