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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: donations made in connection with betting and gaming

Any trader providing gaming facilities who receives significant amounts of income which it is claimed, are donations should be asked to explain the precise circumstances in which the donations are made. There have been cases where amounts described by gaming clubs as donations were found to be consideration for supplies of services.

For example, a gaming club provided its members with games of bridge and backgammon. Amongst other things the club deducted 10% of the winnings due to winning players, described as ‘additional card money’, which the club claimed was a voluntary donation from members towards club funds. However, the method used to levy it meant that members had no option but to pay the money. The money was not a donation but further consideration for participating in the games.

An area of particular concern is clubs that offer games of poker, where for example, charges are mis-described as ‘voluntary service donations’.

Further guidance on donations and considerations can be found in VATSC.