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HMRC internal manual

VAT Betting and Gaming Guidance

Gaming and amusement machines: the taxable person - who should account for VAT on the machine takings?: supply of the machine to the player

It is important to identify the ‘person’ who makes the supply of the machine to the player, because it is that person who must account for VAT on the machine’s takings. Applying basic principles, the person who makes the machine available for use is normally the person who exercises day-to-day control over the operation of the machine and is entitled to the takings. It is the person who controls the premises on which the machine is sited allows access to the public and has the right to refuse to allow any person to play any particular machine.

In this respect, the information contained on the licences, permits and so on issued under the different parts of the Gambling Act, which machine operators must have to function within that law, is also very important in identifying the taxable person. The taxable persons for the various categories under the law are as follows:

* commercial gaming premises licensed under sections 65, 68 and 150 of the Gambling Act 2005 (e.g. casinos, bingo halls, adult gaming and family entertainment centres): the holder of the licences or that person’s employee;
* clubs or miners’ institutes possessing a club machine permit under section 273 of the Gambling Act 2005: any officer or member of the club or any person employed by them;
* public houses and other premises licensed to sell alcohol: the person named on the licensed premises gaming machine permit under section 283 of the Gambling Act 2005;
* travelling pleasure fairs: the showman who owns and operates the fair;
* unlicensed gaming machines: normally the person who controls its operation, but the supply position will depend on the particular arrangements in each case (although these machines are unlicensed, the takings from them are liable to VAT);
* machines excluded from the definition of a gaming machine: the person who grants the player the right to use the machine. This may be the site owner or occupier of the premises that purchases, hires or rents the machine, The hire agreement may not be for a fixed rental and may instead involve payment by means of a share of the takings.

Although the above explains what normally occurs, it is contractually possible for the supply of a machine to the player to be made by the owner of the machine, rather than the owner/occupier of the premises. Where it is claimed that such an arrangement exists it will be necessary to look at all the agreements covering the use of the machine. If, after studying all the agreements and discussing them with the trader, it is still not possible to resolve the question of who is making the supply, then the VAT Advisory Team should be consulted.