The appellant, Hippodrome Casino Limited (HCL), had been claiming residual input tax on the complimentary food, drinks and free £5 chips it was giving to customers, which had been approved at an earlier appeal at the First Tier Tribunal (FTT).

In total, £1.2m worth of free food and drink was given to gaming customers, when just £7.2m was earned from hospitality in the casino over the sever-year period in dispute.

At the appeal, the Hippodrome disputed HMRC’s position on the chargeable VAT and was claiming 32% of the VAT on all residual costs or £447,280 back in exempt gaming supplies.

The period in question covered ran from 2012-13 to 2018-19 tax years and revolved around the Hippodrome relying on a ‘floorspace method by way of standard method override (SMO) to displace the standard method of apportioning residual input tax’.

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