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HMRC internal manual

VAT Betting and Gaming Guidance

HM Revenue & Customs
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Machine games: treatment of tokens and prizes awarded from machines: circumstances where trader need not account for VAT on tokens on a separate machine basis

As explained in VBANDG12200, it may not always be possible or desirable to insist that a trader account for VAT upon the taxable token takings of each machine individually.

Site-wide basis of accounting may be permitted if the following conditions are met:

  • trader establishes the initial level of tokens on the site;
  • trader records the volume of new tokens subsequently introduced into the system;
  • you are satisfied that there are no excessive revenue risks.

Exceptionally, tokens upon a site may be totally disregarded for VAT purposes. This entails satisfaction of the following conditions:

  • trader is able to establish that the tokens used upon the site are not used by other traders (you may regard this condition as met if no other trader in geographical proximity uses the same type of tokens as your trader);
  • trader does not exchange cash within machines for tokens as described in VBANDG13500.

If the above conditions are satisfied this does not mean that your approval should be automatic; other circumstances particular to your trader’s activities may justify your insistence that the token takes should be calculated on a site-wide or individual machine basis.