The Value Added Tax (Betting, Gaming and Lotteries) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order, which comes into force on 1st September 2007, amends Group 4 of Schedule 9 to the Value Added Tax Act 1994 to reflect the coming into force in Great Britain of the Gambling Act 2005.

Group 4 of Schedule 9 exempts from VAT certain types of betting, gaming and lotteries. Note (1)(b) to Group 4 contains an exception from that exemption. Betting or gaming falling within Note 1(b) is therefore subject to VAT.

Article 3 substitutes a new Note (1)(b). The previous Note (1)(b) referred to a provision of the Gaming Act 1968, which is repealed by the Gambling Act 2005. The new Note (1)(b) provides that the grant of the right to play a game of chance for a prize will not fall within the item 1 exemption unless the playing of the game falls into one of the categories specified in Note (5).

Article 4 inserts additional Notes (5) to (11). Note (5) specifies the five categories of gaming which are excepted from Note (1)(b). Fees charged for the grant of a right to play those games therefore fall within the item 1 exemption from VAT.

The first category, remote gaming, is defined by reference to remote gaming duty. Sections 26A – 26M (remote gaming duty) are inserted into the Betting and Gaming Duties Act 1981 (c. 63) by Part 1 of Schedule 1 to the Finance Act 2007 (c. 11). It is anticipated that the provisions of Schedule 1 will be brought into force with effect from 1st September 2007.

The other four categories are defined by Notes (6) - (10).

Note (11) contains relevant legislative definitions.

A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.