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Revenue and Customs Brief 12 (2021) VAT treatment of gaming machines from 6 December 2005 to 31 January 2013


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Published 25 August 2021

Purpose of this brief

This brief explains HMRC’s position after the decision of the First-tier Tribunal on 30 June 2021 about the cases:

  • The Rank Group Plc TC/2013/04417
  • 2016 G1 Ltd TC/2010/08268

These cases were heard together and relate to the third strand of the gaming machine fiscal neutrality litigation.

The brief tells you how businesses with appeals related to this decision can reclaim overpaid VAT.

Who needs to read this

You should read this if you are a business with an appeal claiming that HMRC’s treatment of your gaming machine income as standard rated was a breach of fiscal neutrality. These appeals:

  • should be currently stood behind The Rank Group Plc and 2016 G1 Ltd
  • relate only to the period from 6 December 2005 to 31 January 2013

These are appeals that were previously stood behind Colaingrove Ltd and relate to gaming machines defined by the Gaming Act 1968 under either:

  • section 16/21 machines
  • section 31/34 slot machines

Following the Gambling Commissions review of categories of gaming machines these were reclassified as:

  • Category B1, B3, B3A, B4, C or D machines.

These machines were usually found in amusement arcades, clubs and other venues. Colaingrove Ltd withdrew its appeal in 2018 and The Rank Group Plc and 2016 G1 Ltd replaced Colaingrove Ltd as joint lead appellants for this strand of the litigation.


This is a historical issue. The law changed with effect from 1 February 2013 when the Machine Games Duty was introduced to standardise the taxation of these and other gaming machines.

The gaming machine litigation started over 13 years ago and consisted of 3 different strands. The litigation in respect of the other 2 strands — whose lead cases were, respectively, The Rank Group Plc and Done Brothers Ltd — concluded last year when HMRC accepted the joint Upper Tribunal decision in relation to those appeals.

Revenue and Customs Brief 05/20 told claimants with valid appeals stood behind The Rank Group Plc and Done Brothers Ltd how to obtain payment in relation to their claims.

First-tier Tribunal decision

The First-tier Tribunal decided that the typical consumer would view the games operated by the appellant as similar to the comparator games which were exempt from VAT. This meant that:

  • there had been a breach of fiscal neutrality because similar supplies of services in competition with each other had been treated differently for VAT purposes
  • the games operated by the appellant were therefore exempt from VAT

This decision ends the final strand of the gaming machines fiscal neutrality litigation.

Limits on claims

A claim will not be considered valid unless it:

  • was made within the relevant deadline
  • has a related valid appeal lodged with the Tribunal

You cannot make new claims at this stage.

Claims will only be paid when there is proper evidence. HMRC may ask for more information after examining evidence provided with a claim. If you do not provide this, the claim may not be paid.

The following will be taken into consideration in relation to claims:

  • the requirement to apply revised partial exemption
  • input tax adjustment
  • capital goods scheme calculations

Claims will also be adjusted for any amounts due to set-off under:

  • section 81(3) of the VAT Act 1994 (outstanding debts, assessments, etc.)
  • section 130 of the Finance Act 2008 (outstanding debts under any other head of taxation)

How to progress a claim

HMRC will now pay valid claims.

If you think you have a valid claim, you should first refer to HMRC’s email policy.

If you have an allocated Customer Compliance Manager, send the information direct to them. Otherwise you must quote ‘Gaming Machine Fiscal Neutrality claim 2005 to 2013’ in all communication, by email to

If you are unable to send the information by email, you can send it to:

HM Revenue and Customs
VAT Error Correction Unit
NE98 1ZZ

Due to coronavirus (COVID-19), we recommend that submissions are made by email wherever possible. The need to social distance means postal submissions are likely to experience delays in processing.

What you need to provide

You’ll need to provide:

  • the claimant name, postal address and VAT registration number — including details of any changes since the original claim was made
  • all related Tribunal reference numbers
  • official status within the business of the person submitting the claim
  • confirmation that the business accepts the risks outlined in HMRC email policy.

HMRC is keen to progress the consideration and payment of valid claims as quickly as possible. To speed this, you should also provide the following:

  • the total claim, broken down by reference to each VAT accounting period separately identifying output tax, input tax and the Tribunal reference number
  • details of any input tax that is irrecoverable as a result of the claimants revised partial exemption position as applicable at the time of the claim — this should include the supporting partial exemption calculations, capital goods scheme calculations and confirmation of the partial exemption method in use
  • documentary evidence to demonstrate which category of gaming machines were operated by the claimant throughout the claim period

If you do not have all this information you should provide as much as possible. You should tell us:

  • what evidence is missing
  • what steps you have taken to retrieve it
  • the reasons why it is not available

We will review the information and take into consideration any historic information we already have. We may also ask for further information.
HMRC will not pay those claims where there is not enough evidence available.

Agents representing multiple claimants may provide HMRC with a schedule, listing:

  • the required information for each of their clients
  • your current agent authority to act in respect of these claims

Only the business which incorrectly accounted for VAT may make a claim to recover it.

Other claimants should:

  • make contact using the relevant details
  • provide details about why they believe that they have a valid claim

Direct tax implications

Repayment of overpaid output tax and statutory interest claims may have direct tax implications. For example, repayment of output tax should be treated as taxable receipts for Corporation Tax purposes in the year repayment is made.


If you have not taken reasonable care in calculating your valid claim, you may be charged a penalty.

HMRC email policy

Writing to HMRC by email

Use the following information to decide whether you want to deal with us by email. We take the security of personal information very seriously. Email is insecure, so it’s very important that you understand the risks before you email us. We’ll not deal with you by email unless you tell us you accept the risks of doing so.

About the risks

The main risks associated with using email that concern HMRC are:

  • confidentiality and privacy — there’s a risk that emails sent over the internet may be intercepted
  • confirming your identity — it’s crucial that we only communicate with established contacts at their correct email addresses
  • there’s no guarantee that an email received over an insecure network, such as the internet, has not been altered during transit
  • attachments could contain a virus or malicious code

How we can reduce the risks

We’ll desensitise information, for example by only quoting part of any unique reference numbers. We can also use encryption. We’re happy to discuss how you may do the same but still provide the information we need.

If you do not want to use email

You may prefer that we do not respond by email. For example, because other people have access to your email account.

If so, we’re happy to respond by an alternative method. We‘ll agree this with you either by telephone, fax or in writing by post.

If you want to use email

If you would like to use email, we’ll need you to confirm in writing by post, email or fax that:

  • you understand and accept the risks of using email
  • you’re content for financial information to be sent by email
  • attachments can be used

If you’re the authorised agent or representative, we’ll need you to confirm in writing by post, email or fax that your client understands and accepts the risks.

You must also:

  • send us the names and email addresses of all people you would like us to use email with — for example, you, your staff, your representative or your agent
  • confirm you have ensured that your spam filters are not set to reject or automatically delete HMRC emails

How we use your agreement

Your confirmation will be held on file and will apply to future email correspondence. We’ll review the agreement at regular intervals to make sure that there are no changes.

Opting out

You may opt out of using email at any time by letting us know.

About the Author

© Crown Copyright 2021.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2021-08-25 21:53:51 in Tax Articles

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