Operators of Amusement With Prizes (AWP) machines who receive VAT refunds as a result of a review carried out by HM Revenue and Customs (HMRC) in the wake of a court reverse in 2009 are advised to ensure that they are able to repay the refund if necessary, as HMRC are appealing against the decision.
The ruling of the European Court of Justice (ECJ) is expected shortly. If the ECJ upholds the judgment, it will lead to more than £26 million in VAT refunds to operators of AWP machines. If HMRC are successful, demands will be issued for the repayment of VAT refunds already made.
Licensees are therefore advised to ensure that they are able to meet a demand for the repayment of a refund received until the final position is confirmed.
Where the licensee is a tenant, landlords may require the sum refunded to be paid across, but this should be resisted unless some form of guarantee of repayment is made in the event that it becomes repayable to HMRC.