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HMRC internal manual

VAT Betting and Gaming Guidance

HM Revenue & Customs
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Services connected with betting and gaming but not covered by the Group 4 exemption: liability of payments made by bookmakers attending greyhound and horse racecourses

Badge money

On-course bookmakers attending greyhound racetracks and horse racecourses have to pay an admission charge which entitles them to stand and take bets at the track. This is known as ‘badge money’ or the ‘badge box fee’ and under the provisions of the Gambling Act 2005 the amount should currently not exceed five times the normal charge made to the public for their admittance to that part of the stadium, although this provision is likely to be abolished by 2012; there are already no limits for new pitch sales.

Badge fees paid at greyhound tracks are normally standard-rated because the bookmaker is not granted a specific site on which to stand. We regard the position at horse racecourses as different because the bookmaker is normally granted the right to occupy a specific site in an enclosure in return for the payment. The supply is therefore exempt under item 1 of Group 1 of Schedule 9 to the VAT Act 1994, unless the racecourse has opted to tax the land under paragraph 2 of Schedule 10.

Sales of pitches

The Administration of Gambling Tracks Limited (AGT Ltd), formerly known as National Joint Pitch Council (NJPC), set up by the Horseracing Betting Levy Board (HBLB) in 1998, is responsible for administering betting rings. These are lists of authorised bookmakers held by AGT Ltd for each racecourse. The local JPC designates the layout of the betting area and sets the maximum number of pitches. Pitches are allocated according to seniority. Therefore the bookmaker who holds the first list position gets first choice of pitch, the second on the list gets second choice, and so on. Bookmakers must advise AGT Ltd if they are opting out of a meeting, and must attend a certain minimum percentage of events in order to remain on the list. When pitch requirements are known, AGT Ltd allocates them as above. Bookmakers may then set up their ‘joint’ (stand and equipment) on their pitch, of which they have exclusive use for the duration of the meeting.

The transfer of a list position (‘sale of a pitch’) is done either by auction or private sale. As the bookmaker has neither a legal nor beneficial interest in any particular pitch, there is no sale of land for VAT purposes, meaning that the supply of the transfer of the list position is taxable at the standard rate