Many UK bingo clubs could be on the brink of closure since the new tax system was announced in last week's 2009 budget.  The Chancellor abolished VAT on Bingo participation fees and hiked the Gross Profits tax up from 15% to 22% much to the dismay of the land based bingo industry. The government claimed that dropping the 15% VAT and applying an extra 7% to gross profits tax would be roughly the same net tax to the treasury.

These figures are strongly disputed by many bingo clubs as some bingo games namely prize for cash were already VAT exempt so these games will now increase the tax burden by almost 50%.  In some companies that are just about surviving and were clinging on to the hope that the long fought battleover VAT would be won could now face losing their businesses.

This new tax regime will not affect the VAT reclaims that the bingo industry are awaiting a decision on but it puts paid to any future savings that a favourable decision would have given.

The Bingo Association are in close contact with the treasury and working towards negotiating a fairer deal.  The bingo industry has spent many years campaigning for a fairer tax system but has failed in its attempt.  As the treasury have said they intended the new tax system to be a simplification and not an increased burden, it is hoped that if the Bingo industry can demonstrate the new tax rules are an increased burden, then maybe the government will reconsider.

Further news on the tax issue will be emerging over the next few weeks and bingosupermarket intend to keep everyone updated.  Further gloom on the Mecca Bingo VAT case was also announced last week as their legal representitives announced that the decision they have already won through the courts could still be appealed and not decided on for years.