Summary 

HMRC appealed against two decisions of the First-tier Tribunal (FTT) relating to VAT in respect of supplies to retail customers of the ability to play various games of chance on gaming machines. 

Although the two FTT decisions relate to separate appeals on separate issues, the appeal before the Upper Tribunal relates to a single issue which is common to both decisions. The parties requested that the Tribunal provide a single judgment in respect of both appeals. 

In broad terms HMRC submitted that in both decisions the FTT erred in law in relation to the evidence which it took into account in applying the EU test of fiscal neutrality. 

Background 

While supplies of gambling made through section 16/21 machines and through fixed odds betting terminals (“FOBTs”) were treated by HMRC as exempt from VAT, supplies made through section 31/34 machines were