Publicans who received tax rebates on overpaid VAT on gaming machines are now set to receive demands to pay it back following a court ruling.
The Court of Appeal has reversed a 2009 High Court ruling which led to hundreds of pub operators receiving the tax rebates.
As a result, HM Revenue and Customs (HMRC) has now confirmed it is writing to those who made the original claims to claw back the rebates, which it is says amount to several hundred million pounds. They will be required to pay back the money, plus interest at the rate of 3% per annum for the past two years, within 30 days.
Concerns have been raised that this will place a considerable financial burden on many licensees, particularly those who may have spent the rebate rather than putting it to one side, or those that have suffered due to the recent adverse weather conditions.
However, HMRC says it will be able to reach a “mutually agreeable payment schedule” for those struggling to pay within the given timeframe, although this will incur additional interest charges.
At Milsted Langdon, our licensed trade specialists can advise you on a wide range of matters, including budgeting and making the most of available tax saving opportunities. For further information, please contact us.