The tax payer had sought repayment of sums of VAT charged to a particular form of gaming, saying that the rules infringed the principles of fiscal neutrality under European law. HMRC now appealed against a finding that the machines were exempt from VAT.
Rimer LJ said that a narrow reading might lead to absurdity: That cannot be the correct construction of the word ‘machine’. The word must, if the language of Part III is to be given a sensible and practical effect that will enable it to achieve its obvious purpose, be interpreted as including equipment ancillary, and connected, to the playing terminal that automatically provides the element of chance that determines the outcome of the game played on the terminal . .
If this is right, it follows in my view, and for like reasons, that a purpose built system comprising a terminal with a separate, but connected, RNG is also properly characterised as a ‘machine’. The terminal cannot be used for gaming purposes except by being linked to the RNG; and the RNG is designed to be linked to the terminal in order to enable the game to be played. Again, no doubt they constitute two separate items of equipment; but to treat the terminal as a separate ‘machine’ in considering the impact or otherwise of Part III is unrealistic. They are being used together for the purpose of playing a game on the terminal and the RNG forms an essential element of the system.
If right so far, I also do not understand why the multi-terminal systems should be treated any differently. The fact that there is only one RNG serving several terminals cannot make a material difference. In substance, the systems are exactly the same as in both previous configurations. By like reasoning, I cannot see why each terminal and the single RNG do not together constitute a machine within section 26. That is the substance of any such multi-terminal system; and it is the substance of the matter that counts.’
Rimer, Beatson, Floyd LJJ
[2013] EWCA Civ 1289, [2013] BVC 526, [2013] STI 3396, [2014] STC 470
Bailii
Gaming Act 1968
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 . .
Lists of cited by and citing cases may be incomplete.
VAT, European
Updated: 23 November 2021; Ref: scu.517235