VAT and Gaming Machines
A new business brief outlines HMRC’s approach to the VAT and Amusement Machine Licence Duty (AMLD) liability of a machine known as an ‘electric lottery terminal’. HMRC understand that these machines are being marketed as a lottery type of game which is exempt from VAT and lottery duty and outside the scope of AMLD.
HMRC do not agree with this contention and remind businesses which operate these types of machines that they are gaming machines if they fall within the definition of a gaming machine in the VAT Act 1994 and the Betting and Gaming Duties Act 1981.
All income from gaming machines, regardless of how they are marketed, is standard rated for VAT and may be subject to AMLD.
HMRC state that businesses must account for VAT on any income received from an ‘electronic lottery terminal’ and hold a valid AMLD licence before making the terminal available for use (subject to the usual rules). Businesses that have underdeclared any VAT due should correctly account for the error.