Pre-Budget Report Released
By James
The online gaming community had been eagerly awaiting the Chancellor’s pre-budget report, hopeful of an announcement regarding the rate of gamoing duty. Unfortunately, the only mention of this issue in the report was to state that “the rate of this new duty will be set in next spring's Budget.”

There were however other significant points for the industry including:

·The change to the definition of 'gaming machines' for VAT purposes and the Government's announcement that it will retain and extend the current gaming machine regime (i.e. VAT and amusement machine licence duty ('AMLD')) across all types of gambling machines rather than moving to a gross profits tax ('GPT') regime. 'Gaming machine' is now to be defined as 'a machine which is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes)', which reflects the wide definition of 'gaming machine' to be introduced under the Gambling Act 2005. This new definition should defeat such attempts to avoid VAT.

·The new definition for Fixed Odds Betting Terminals (FOBT) now brings them into the VAT gaming machine regime. This has been effected as a pre-cursor to the Gambling Act 2005 changes. Prior to 6 December 2005, bookmakers were liable to account for GPT (at 15%) on the net takings of a FOBT and no VAT liability arose. From 6 December 2005 onwards, however, no GPT will arise on the net takings of FOBTs but, instead, the person entitled to the net takings of the machine will have to account for VAT at the standard rate.

·Those machines developed to take advantage of section 16 of the Lotteries and Amusements Act 1976 or section 21 of the Gaming Act 1968 will now be brought within the scope of VAT.

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