Gaming machines: A VAT opportunity – definitely worth a flutter!
As you may be aware, a further opportunity has recently arisen for the recovery of VAT declared on gaming machine income in the past four years.
This opening follows the same principles of the “Linneweber” case – this was the chance for operators of gaming machines, including many clubs, to reclaim previously paid output VAT. Many clubs followed this procedure and obtained substantial refunds from HMRC. These claims were for VAT paid on gaming machine takings pre 6 December 2005.
The new opportunity for clubs to recover VAT on ordinary gaming machines is being referred to as “Linneweber 2”, and is based on the difference in treatment between machines which HMRC accept as being ‘gaming machines’.
This current opportunity is not restricted to any club which previously claimed a VAT refund, it is available for all clubs. Should you act for a club or any business which has operated these gaming machines and will therefore have accounted for VAT in the past few years, it is worth considering such a claim. Whilst VAT recovery is not guaranteed under Linneweber 2, there is a good chance of your client reclaiming substantial amounts and we believe it is now a more worthwhile opportunity.
As there is the standard four year cap on retrospective claims, timing is of the essence as always. The outcomes of the VAT Tribunal decisions in this area have led to there being two distinct periods for which such claims can be made ( the other being the period beyond the 4 year period ).
Please do make your clients aware of the possibilities under Linneweber 2, as it could result in a substantial repayment from HMRC provided the claim is submitted and properly documented.
18 October 2010
Who to contact?
If you have clients who may benefit from the above, in the first instance please contact Craig Hughes on 07717 840 596 or email at chughes@edftax.co.uk.