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HMRC internal manual

VAT Valuation Manual

Special valuation provisions: value of gaming-machine takings

The VAT Act 1994 section 23 provides for the valuation of gaming machine takings up to 31 January 2013

(1) Where a person plays a game of chance by means of a gaming machine, then for the purposes of VAT (but without prejudice to subsection (2) below) the amount paid by him to play shall be treated as the consideration for a supply of services to him.

(2) The value to be taken as the value of supplies made in the circumstances mentioned in subsection (1) above in any period shall be determined as if the consideration for the supplies were reduced by an amount equal to the amount (if any) received in that period by persons (other than the person making the supply and persons acting on his behalf) playing successfully.

(3) The insertion of a token into a machine shall be treated for the purposes of subsection (1) above as the payment of an amount equal to that for which the token can be obtained; and the receipt of a token by a person playing successfully shall be treated for the purposes of subsection (2) above

(a) If the token is of a kind used to play the machine, as the receipt of an amount equal to that for which such a token can be obtained;

(b) If the token is not of such a kind but can be exchanged for money, as the receipt of an amount equal to that for which it can be exchanged.

As from 1 February 2013

23(1) If a person plays a relevant machine game, then for the purposes of VAT the amount paid by the person is to be treated as consideration for a supply of services to that person.

23(2) “Relevant machine game” is defined in section 23A.

23(3) The value to be taken as the value of supplies made by a person (“the supplier”) in the circumstances mentioned in subsection (1) in any period is to be determined as if the consideration for the supplies were reduced by an amount equal to X.

23(4) X is the amount (if any) paid out in that period by way of winnings in respect of relevant machine games made available by the supplier (whether the games were played in the same period or an earlier one).

23(5) X does not include any winnings paid out to the supplier or a person acting on the supplier’s behalf.

23(6) Inserting a token into a machine on which a relevant machine game is played is to be treated for the purposes of subsection (1) as the payment of an amount equal to that for which the token can be obtained.

23(7) Providing a specified kind of token by way of winnings is to be treated for the purposes of subsection (4) as the payment out of an amount by way of winnings equal to the value of the token.

23(8) A specified kind of token is-

(a) a token that can be inserted into the same machine to enable games to be played on the machine, or

(b) a token that is not of such a kind but can be exchanged for money.

23(9) The value of a specified kind of token is-

(a) for a token within subsection (8)(a), an amount equal to that for which the token can be obtained, and

(b) for a token within subsection (8)(b), an amount equal to that for which the token can be exchanged.

23(10) If it is not reasonably practicable to attribute payments and winnings to relevant machine games or to apportion them between relevant machine games and other games or other activities, any attribution or apportionment is to be done on a just and reasonable basis.

This is explained fully in VAT Betting and Gaming Guidance at VBANDG06000. The VAT Liability Policy team has responsibility for this area.