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Mecca Bingo Owner to Receive £77m HMRC Refund

Finding out that you’ve overpaid your taxes can often result in you receiving an unexpected cheque from the taxman. However, it’s not often that you’re owed more than £77m!

This week, Rank, the owner of Mecca Bingo and Grosvenor Casino, finally managed to reach an agreement with HMRC that will see it receive a £77.5m VAT refund, plus around £5m in lost interest compensation.

Why is the refund due?

The Rank Group was overcharged on FOBT machine takings between 2006 and 2013. The challenge to the charge has been ongoing for many years, with many appeals being made against rulings laid down.

Incredibly, the settlement has taken ten years to resolve, but after the FTT (First-Tier Tribunal Tax Chamber) ruled in Rank’s favour back in August 2021, the HMRC were no longer able to challenge Rank’s appeal.

The overpayment, which consisted of incorrectly charged gaming machine duties on FOBTs (Fixed Odds Betting Terminals) was deputed by both Rank and Betfred which independently lodged disputes with HMRC.

Rank Group and tax

UK betting operators including Rank make a significant contribution to the UK economy each year through both employment and tax, and last financial year, Rank paid £121m in local business rates, employer’s national insurance, corporate tax, gambling taxes and irrecoverable VAT. This is despite the company suffering heavy losses due to its casinos and bingo halls being closed for large parts of 2020 and 2021 due to COVID-19.

Rank’s Mecca Bingo brand currently has to pay a 10% gaming duty on its main stage and interval bingo profits, 20% on Category B3 and Category C gaming machines, and 5% on Category D gaming machines.

There’s light at the end of the tunnel though.

Despite racking up big losses in the 13 weeks to 15 August 2021, the Rank Group’s profits finally appear to be bouncing back following the reopening of its venues. In October 2021, the group’s chief executive said that he expected trading to continue improving as the year progresses.

Provided that there are no more lockdowns, Rank predicts that its like-for-like NGR (Net Gaming Revenue) for the year ending 30th June 2022 to be in the region of £700m to £750m. The operator has also stated that the refund it is now to receive will be used to strengthen its balance sheet and to fund further progress with its ‘transformation programme’.

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