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HMRC internal manual

VAT Betting and Gaming Guidance

Services connected with betting and gaming but not covered by the Group 4 exemption: telephone betting services

Sometimes companies lay bets over the telephone with bookmakers on the punter’s behalf. The VAT liability depends upon what, if anything, is being supplied.

For example, a company sets up a service to provide a horserace bet-placing service for certain clients. The arrangement is for a six month period and each client pays a service charge to cover administration costs and a float to use for bets selected by the company. At the end of the six month period the company returns to the punter any float remaining where no net winnings have been made. If there are winnings they will also be returned, minus a percentage as commission, along with any float balance.

The liability of the payments is as follows:

  • The commission on the winnings and the service charges are consideration for supplies of services outside of the exemption and standard-rated.
  • The float is not consideration for any supplies of services and is outside the scope of VAT.