VBANDG04000 - Unlawful gaming
The Gambling Act 2005 lists a number of conditions under which providing facilities for gaming constitutes an offence.
However, the fact that payments connected with gaming are unlawful under the Gambling Act does not mean that they cannot still be consideration for VAT purposes. This is in accordance with the general guidance on illegal supplies in VATSC.
This means that admission charges and subscriptions are always standard-rated and that stake money is always outside the scope of VAT. The treatment of session/participation charges will be exempt.
Following EU principles concerning fiscal neutrality issues on the subject of illegal supplies, if traders set up a gaming club or centre illegally, without the appropriate Gambling Act licence or permit, their supply would be exempt, if the corresponding legal supply made with the correct licence or permit would also have been exempt.
Handling cases of illegal gambling
HMRC is responsible for the VAT and Excise Duty implications of illegal betting and gaming. If you discover that a trader is providing illegal gambling, an immediate report should be made to the Gambling Unit of Expertise. No suggestion should be made to the trader that the matter will be reported either to the Gambling Commission (GC) or to the police.
However, HMRC may provide the GC, for use in the exercise of its functions, information received by HMRC in the exercise of its own functions in relation to the betting and gaming duties. The gateway is permissive in that HMRC may choose to disclose to the GC, but cannot be compelled to do so. HMRC will disclose to the GC only, not to any other person or body.
In most cases, the relevant excise team will provide information to the GC under terms of a Memorandum of Understanding - see EXGG1530.