Rank Might Get Tax Back
22nd May, 2008
Rank Group Plc, one of leading UK bingo club owners, has received an acceptance of its claim for £36.3 million tax refund due to the unfair taxation on several forms of gambling.
According to the Regulatory News Service statement released today by the U.K. tribunal, a value-added tax on interval bingo applied to Rank has violated European Union law and therefore needs to be reconsidered with measures taken to recover the mistake.
The government has rights to appeal against this statement up until July 10 this year.
This tax has been criticized and appealed against by many companies and some pressure groups due to the unfair characteristics of it in the eyes industry players. The double taxation has been affecting all bingo operators who saw a decrease in revenues and toughened market environment, especially after the smoking ban was implemented in July last year.
There has been an appeal filed against the gaming revenues’ VAT, that is perceived to be discriminatory by the bingo operators, as other types of gambling do not have such tax burden imposed upon. The appeal was rejected only in March this year, but looks like now the new appeal might follow if Rank gets its refund on some of these taxes.
Nevertheless, according to the research note released by analyst Mark Reed at Landsbanki, London; even if the refund taxes place it will not “change the fundamentals.''
He stated that he does not see the industry getting anywhere closer to the former strong position in the nearest future. “Given our concerns about the weakening UK consumer and its likely ongoing impact on Rank's business,'' he added.
By Elena
