The question raised by this appeal is whether, during the period 1 October 2002 to 5 December 2005, the takings on a particular category of gaming machines operated by the appellants were subject to VAT. The answer depends on whether the takings resulted from the provision of a ‘gaming machine’ as defined in Note (3), more particularly whether for the purposes of that definition the element of chance in the game was ‘provided by means of the machine’. If not, the takings were exempt.
Lord Carnwath said: ‘The relevant phrase is ‘the element of chance in the game is provided by means of the machine’. In the words of Norris J, it is ‘the determining event which governs the outcome of the game being played on the machine . . which the player is playing’. Chance is the possibility of something happening, not in the abstract, but for a particular player in the context of a particular game; in other words, the possibility of that player getting the combination of numbers which wins a prize or conversely a combination which does not.
Here what determines the outcome of the game is the pressing of a button (or pulling a lever) on the terminal. The pressing of the lever is a more sophisticated equivalent of a player rolling a dice. In that context, it can fairly be said, the winning number is produced ‘by means of’ the player’s action in throwing the dice. So here the RNG produces a pre-programmed sequence of numbers which changes very rapidly. The element of chance in any game is provided ‘by means of’ the action of the particular player in pressing the button and so interrupting that ever-changing sequence at a particular moment. The terminal is not simply communicating information from the RNG, but is the active means by which the winning or losing combination is generated. The RNG is a necessary part of that process, but its response (wherever situated) is entirely automatic. In those circumstances, it is a fair use of language in my view, and consistent with the apparent policy of the legislation, to describe the element of chance as provided ‘by means of’ the terminal.’
Lord Neuberger, President, Lord Reed, Lord Carnwath, Lord Toulson, Lord Hodge
[2015 UKSC 48, [2015] WLR(D) 299, [2015] STC 1921, [2015] 4 All ER 77, [2015] LLR 665, [2015] BVC 31, [2015] 1 WLR 3472, [2015] STI 2395, UKSC 2013/0257
Bailii, WLRD, SC, SC Summ, Bailii Summary
England and Wales
Citing:
At VDT (1) – The Rank Group Plc v Revenue and Customs VDT 27-May-2008
VDT EXEMPT SUPPLIES – Gaming – Mechanised cash bingo under Gaming Act 1968 s.14 excluded from exemption – Similar supplies under s.21 exempt – Whether principle of fiscal neutrality infringed – Same company . .
At VDT (2) – Rank Group Ltd v Revenue and Customs VDT 19-Aug-2008
VDT COMMUNITY LAW – Fiscal neutrality – Exemption – Gaming – Provision of gaming machines excluded from exemption – Similar supplies under Part III of Gaming Act 1968 exempt – Whether principle of fiscal . .
At ChD – Revenue and Customs v The Rank Group ChD 8-Jun-2009
The court was asked whether the VAT treatment of mechanised cash bingo breaches the principle of fiscal neutrality: and the core issue on the appeal is whether the burden lay on Rank to adduce evidence to prove not only that there was a difference . .
At FTTTx – The Rank Group Plc v Revenue and Customs FTTTx 11-Dec-2009
FTTTx Community Law – Fiscal neutrality – Exemption – Exclusion of provision of ‘gaming machines’ from exemption – Whether taxed machines similar to exempt machines – Relevance of regulatory regime – TNT [2009] . .
At ECJ (1) – Commissioners for Her Majesty’s Revenue and Customs v Rank Group plc C-260/10 ECJ 10-Nov-2011
ECJ Taxation – Sixth VAT Directive – Exemptions – Article 13B(f) – Betting, lotteries and other forms of gambling – Principle of fiscal neutrality – Mechanised cash bingo – Slot machines – Administrative practice . .
At ECJ (2) – Commissioners for Her Majesty’s Revenue and Customs v Rank Group plc C-259/10 ECJ 10-Nov-2011
ECJ Taxation – Sixth VAT Directive – Exemptions – Article 13B(f) – Betting, lotteries and other forms of gambling – Principle of fiscal neutrality – Mechanised cash bingo – Slot machines – Administrative practice . .
At UTTC – HMRC v The Rank Group Plc UTTC 4-Oct-2012
Taxation – whether gaming or betting and the different VAT Treatment of newer gaming machines. . .
Cited – Regina v Herrod, ex parte Leeds City District Council CA 1976
Lord Denning MR described the game bingo: ‘I expect that everybody knows ordinary bingo. It is played at bazaars, sales of work [sic: in [1976] 1 All ER 273, at 279c, the phrase is ‘places of work’], and so forth, for small prizes and is perfectly . .
Cited – Marks and Spencer plc v Commissioners of Customs and Excise ECJ 11-Jul-2002
The claimant challenged the reduction of the limitation period from six years to three for the reclaiming of overpaid VAT with immediate effect, depriving it of the opportunity to recover sums paid in excess. The company sold vouchers. It paid VAT . .
Cited – Halifax plc etc v Commissioners of Customs and Excise ECJ 21-Feb-2006
ECJ Sixth VAT Directive – Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) – Economic activity – Supplies of goods – Supplies of services – Abusive practice – Transactions designed solely to . .
Cited – Revenue and Customs v Procter and Gamble UK CA 20-May-2009
The court was asked whether Pringles are ‘similar to potato crisps and made from the potato?’ Toulson LJ discussed the need for appellate courts to respect the special knowledge of tribunals: ‘Where a Tribunal has taken into account all relevant . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 02 January 2022; Ref: scu.549909