This brief updates Revenue & Customs Brief 01/11 and explains HM Revenue & Customs (HMRC's) position following the First-Tier Tribunal decision in Dransfield Novelty Company Limited and others (Appeal number: MAN/08/0811).
The Tribunal found against HMRC in part and concluded that for some of the period in question certain electronic lottery terminals did not constitute amusement machines for the purposes of Amusement Machine Licence Duty (AMLD). HMRC are not appealing this decision.
Dransfield Novelty Company is a supplier of machines described as electronic lottery terminals to a number of small members clubs and societies. The machines in question contained an electronic 'virtual' stack of lottery tickets. The electronic stack contained winning and losing tickets. When a coin was placed in the machine and the start button pressed, the machine accessed the next 'ticket' in the stack. The machine did not produce a paper ticket but rather activated an electronic display of spinning fruit wheels which, on ceasing to rotate indicated the winning or losing status of the 'ticket'.
Over the period considered by the Tribunal the definition of 'amusement machine' was subject to technical amendment on three occasions. Notwithstanding these changes it was HMRC's contention that the machines met the definition of an amusement machine throughout the period in question.
The Tribunal was required to decide whether these electronic lottery terminals were amusement machines for the purposes of the Betting and Gaming Duties Act 1981, and as such were properly licensable for amusement machine licence duty purposes. If they were licensable then AMLD would be due and payable.
The Tribunal considered the liability of the machines against the definition of an amusement over four periods which reflected the three changes to the definition of amusement machine.
Period 1 ended on 18 July 2006.
Period 2 ran from 19 July 2006 to 31 October 2006.
Period 3 ran from 1 November 2006 to 20 July 2009.
Period 4 commenced 21 July 2009 and continues.
The Tribunal found that for periods 1, 2 and 4 the machines did not meet the relevant definition. They concluded that for period 3 the machines were gaming machines and therefore amusement machines subject to AMLD.
Whilst HMRC does not agree with the Tribunal finding in relation to periods 1, 2 and 4, they will accept it.
Subject to the normal rules on capping and unjust enrichment, HMRC will consider claims for repayment of AMLD in relation to electronic lottery machines of the type considered by the Tribunal for those periods where they were judged to fall outside the definition of an amusement machine for AMLD, that is, periods 1, 2 and 4. This type of machine will not require an amusement machine licence for any period commencing on or after 21 July 2009. Any repayment in respect of a licence spanning a licensable and non-licensable period will be calculated by reference to the number of days when a licence was not required.
Claims will not be accepted in respect of payments of duty made more than four years before the claim is made.
No claims will be considered for period 3, and assessments that have been raised for that period will be enforced.
If you wish to make a claim you should write to:
Wrexham Technology Park
Your claim should be accompanied by full supporting evidence which will include, for example, details of the licence which is the subject of the claim. If the subject of the claim is a current licence you must send this with your claim.
Issued 30 August 2011