Land based bingo operators are crunching figures and talking to accountants to see what difference the new tax regime is going to have on their businesses. Bingosupermarket have been in contact with a team of accountants and have spoke to independent operators to see what scrapping VAT and increasing Bingo tax to 22% would have on the operator.

Some companies as the governmnet have planned would make the change revenue neutral, meaning that abolishing VAT payable and appling a rise in GPT would make the tax payable largely the same or in some cases the bingo companies would see a marginal improvement.  However some companies like Mecca bingo rightly claim that the increase in AMLD (amusement Licence Duty) would offset and increase the tax burden.

Accountants and operators in the industry are now fearing the worse as previously some games that came under prize for cash and prize bingo were already VAT exempt and had 15% GPT applied to them.  The status of these games has not changed except the operators have now been given a straight 7% rise to 22% almost 50% rise in duty which could actually make or break a small bingo club.

The other oversight that the government appeared to have made is that VAT reclaims will be hugely reduced as since bingo is now VAT exempt, this also exempts the operator from putting in VAT reclaims against investments and overheads.  If the government were to make bingo VAT zero rated then this would have a nuetral impact, but having it VAT exempt means that no such reclaims can now be made.

The treasury have stated that the new tax regime is to simplify the tax system in bingo and not intended to cause hardship to the industry.  The Association and operators within in the Bingo Industry are seeking talks with the government as the industry hopes the oversight by the government will be changed.  At this stage the bingo industry is only seeking a fair system not a favourable one.

The treasury claim that the tax implications will mean that the revenues will claim approximately £10 million more this year, fiscally neutral next year and will claim £5 million less in taxes the following year from the bingo industry.  Some sources dispute these figures as being optimistic but our sources claim they are probably right as with all the closures now expected the government are likely to over deliver on these goals.  If bingo clubs are closed then the government cannot claim the taxes.