Mecca Bingo have stood their ground with HM Revenue and Customs Service, relating to a VAT issue on interval bingo games that are played in their land based bingo clubs and they have just received nearly £60 million in VAT back, which sent Mecca Bingo shares up by 3%. In this current economic climate, that is a significant rise in shares by anyone’s standards, but although they have now been given this VAT rebate back, they are not out of the woods yet as HM Revenues and Customs have appealed the decision, which means this case is set to be heard by the High Courts in early 2009.

If Mecca Bingo loses their VAT battle in the High Courts, they will have to pay all this VAT back with interest, which is why Rank shareholders will probably be waiting with baited breath until all this legal wrangling is done and dusted. This VAT rebate come about after Mecca Bingo took HM Revenue and Customs Service to the UK VAT and duties tribunal early this year because they were not happy with the fact that they had to pay VAT on some of their interval bingo games and not on offers, they believed (quite rightly so) that all these bingo games are essentially the same, therefore under EU rules they should be taxed the same and not depending on the payout of the bingo game.

The Rank Group first submitted their VAT claim to the tribunal back in 2006 and after much deliberation they finally won this case in the early part of 2008, which meant that they were owed back a spectacular £59.1 million in VAT and this amount was awarded for five years worth of VAT paid on interval bingo games that are played at their land based bingo clubs.

The EU Rules relating to VAT were introduced back in July 2003, but some changes have been made to these rules over the years and whilst they can be quite complex rules to some, they quite clearly state that any supplies or services that are the same or similar should not be treated differently for VAT payments, which in laymen’s terms is in direct confliction to what Mecca Bingo paid in VAT on their interval bingo games, as they was made to pay VAT on some of these games and not on others.