HMRC will also be required to pay interest on this sum, which Rank estimates to total £5.5m, for a total rebate of £83m.
The repayment of VAT and interest will be subject to a 19.0% corporation tax.
This case pertains to fixed-odds betting terminals (B2 gaming machines) and dates back several years.
The introduction of the Gambling Act in 2005 eliminated the VAT exemption for fixed-odds betting machines.
However, VAT exemptions remained for casino, electronic roulette, and online betting terminals.
Rank successfully challenged the erratic application of the exemptions, and the European Union’s Court of Justice ruled in their favor.
Initially, HMRC contested the ruling, but in May 2020, it announced that it would no longer appeal.
This historic decision sets a precedent for gaming machine operators to claim back incorrect VAT from HMRC.
The First-tier Tribunal Tax Chamber (FTT) supported this ruling, and HMRC decided not to appeal in August.
Rank and Betfred were both plaintiffs in the case.
Rank’s claim covered the period between 2002 and 2005, while Betfred focused on 2005-2013.
In its annual report for the 12 months to 27 September 2020, Betfred mentioned an estimated £97.7m rebate.
William Hill expects to receive around £230.3m, and Entain could receive up to £200m.
