Finance Bill

Session 2012 - 13
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Finance Bill

Finance Bill
Schedule 24 — Machine games duty
Part 3 — VAT exemption
562

be read as if the reference in sub-paragraph (3) to the due date were a
reference to the day before the go-live date.
Part 3
VAT exemption
Amendment of VATA 1994
5
63
For section 23 of VATA 1994 substitute—
“23
Value of supplies involving relevant machine games
(1)
If a person plays a relevant machine game, then for the purposes of
VAT the amount paid by the person is to be treated as consideration
for a supply of services to that person.
10
(2)
“Relevant machine game” is defined in section 23A.
(3)
The value to be taken as the value of supplies made by a person (“the
supplier”) in the circumstances mentioned in subsection (1) in any
period is to be determined as if the consideration for the supplies
were reduced by an amount equal to X.
15
(4)
X is the amount (if any) paid out in that period by way of winnings
in respect of relevant machine games made available by the supplier
(whether the games were played in the same period or an earlier
one).
(5)
X does not include any winnings paid out to the supplier or a person
20
acting on the supplier’s behalf.
(6)
Inserting a token into a machine on which a relevant machine game
is played is to be treated for the purposes of subsection (1) as the
payment of an amount equal to that for which the token can be
obtained.
25
(7)
Providing a specified kind of token by way of winnings is to be
treated for the purposes of subsection (4) as the payment out of an
amount by way of winnings equal to the value of the token.
(8)
A specified kind of token is—
(a)
a token that can be inserted into the same machine to enable
30
games to be played on the machine, or
(b)
a token that is not of such a kind but can be exchanged for
money.
(9)
The value of a specified kind of token is—
(a)
for a token within subsection (8)(a), an amount equal to that
35
for which the token can be obtained, and
(b)
for a token within subsection (8)(b), an amount equal to that
for which the token can be exchanged.
(10)
If it is not reasonably practicable to attribute payments and winnings
to relevant machine games or to apportion them between relevant
40
machine games and other games or other activities, any attribution
or apportionment is to be done on a just and reasonable basis.

Finance Bill
Schedule 24 — Machine games duty
Part 3 — VAT exemption
563

(11)
For the purposes of this section, a person plays a game if the person
participates in the game—
(a)
whether or not there are other participants in the game, and
(b)
whether or not a computer generates images or data taken to
represent the actions of other participants in the game.
5
23A
Meaning of “relevant machine game”
(1)
A “relevant machine game” is a game (whether of skill or chance or
both) that—
(a)
is played on a machine for a prize, and
(b)
is not excluded by subsection (2).
10
(2)
A game is excluded by this subsection if—
(a)
takings and payouts in respect of it are taken into account in
determining any charge to machine games duty,
(b)
it involves betting on future real events,
(c)
bingo duty is charged on the playing of it or would be so
15
charged but for paragraphs 1 to 5 of Schedule 3 to the Betting
and Gaming Duties Act 1981 (exemptions from bingo duty),
(d)
lottery duty is charged on the taking of a ticket or chance in it
or would be so charged but for an express exception,
(e)
it is a real game of chance and playing it amounts to dutiable
20
gaming for the purposes of section 10 of the Finance Act 1997
or would do so but for subsection (3), (3B) or (4) of that
section, or
(f)
playing it amounts to remote gaming within the meaning of
section 26A of the Betting and Gaming Duties Act 1981
25
(remote gaming duty: interpretation).
(3)
In this section—
“game” does not include a sport;
“machine” means any apparatus that uses or applies
mechanical power, electrical power or both;
30
“prize”, in relation to a game, does not include the opportunity
to play the game again;
“real game of chance” means a game of chance (within the
meaning of the Betting and Gaming Duties Act 1981) that is
non-virtual.
35
(4)
The Treasury may by order amend this section.”
64    (1)
In Part 2 of Schedule 9 to that Act (exemptions: the groups), the provisions
of Group 4 are amended as follows.
      (2)
After Item 1 insert—
“1A
The provision of any facilities for the playing of dutiable machine
40
games (as defined in Part 1 of Schedule 24 to the Finance Act 2012)
but only to the extent that—
(a)
the facilities are used to play such games, and
(b)
the takings and payouts in respect of those games are taken
into account in determining the charge to machine games
45
duty.”

Finance Bill
Schedule 24 — Machine games duty
Part 4 — Miscellaneous
564

      (3)
In Note (1)—
(a)
for “Item 1 does” substitute “Items 1 and 1A do”, and
(b)
omit paragraph (d) and the word “or” immediately preceding that
paragraph.
      (4)
After Note (1) insert—
5
   “(1A)
Item 1 does not apply to the provision of facilities to the extent that
the facilities are used to play a relevant machine game (as defined
in section 23A).”
      (5)
Accordingly—
(a)
in Part 2 of Schedule 9, in the heading of Group 4, after “GAMING”
10
insert “, DUTIABLE MACHINE GAMES”, and
(b)
in Part 1 of that Schedule, in the Index, for “Betting, gaming and
lotteries” substitute “Betting, gaming, dutiable machine games and
lotteries”.
65    (1)
Paragraph 9 of Schedule 11 to that Act (administration, collection and
15
enforcement) is amended as follows.
      (2)
For paragraph (a) substitute—
“(a)
to open any machine on which relevant
machine games (as defined in section 23A) are
capable of being played; and”.
20
      (3)
In paragraph (b), for “subsection (2) of that section” substitute “section
23(3)”.
      (4)
Accordingly, in the heading immediately before paragraph 9, for “gaming
machines” substitute “machines on which relevant machine games are played”.
Part 4
25
Miscellaneous
Application
66    (1)
The provisions of this Schedule have effect as follows.
      (2)
Part 1 has effect in relation to the playing of machine games on or after 1
February 2013 (and Schedules 55 and 56 to FA 2009, as amended by Part 1 of
30
this Schedule, are taken to have come into force for the purposes of machine
games duty on that date).
      (3)
Part 2 has effect in relation to the provision of amusement machines on or
after 1 February 2013.
      (4)
Part 3 has effect in relation to supplies made on or after that date.
35
      (5)
A reference in this Schedule to the “go-live date” is to 1 February 2013.
67    (1)
The Treasury may by regulations make transitional or saving provision in
connection with the removal of amusement machine licence duty and the
introduction of machine games duty.
      (2)
The power in sub-paragraph (1) is without prejudice to—
40
(a)
the provision made by Part 2 of this Schedule, and

Finance Bill
Schedule 25 — Remote gambling: double taxation relief
565

(b)
any power in this Schedule apart from this paragraph to make
transitional or saving provision in connection with the matters
mentioned in sub-paragraph (1).
      (3)
Regulations under this paragraph are to be made by statutory instrument.
      (4)
A statutory instrument containing regulations under this paragraph is
5
subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 25
Section 193

Remote gambling: double taxation relief
Unilateral relief
1
BGDA 1981 is amended as follows.
10
2
After section 5D insert—
“5E
Double taxation relief
(1)
This section applies if a person (“P”) is liable to pay a qualifying
foreign tax in respect of bets in respect of which P is also liable to pay
general betting duty under a provision of sections 2 to 4 or section
15
5AB (“the relevant provision”).
(2)
Bets in respect of which P is liable to pay both general betting duty
under the relevant provision and the qualifying foreign tax are
referred to as “eligible bets”.
(3)
Credit may be allowed for all or part of the qualifying foreign tax
20
paid by P.
(4)
Whether any credit is allowed is determined in accordance with
Schedule A1.
(5)
If credit is allowed for an accounting period, P is entitled to claim a
repayment of so much of the duty actually paid as is equal to the
25
amount of credit allowed.
(6)
Total repayments to P for that accounting period in respect of bets of
the applicable class (taking into account all qualifying foreign taxes)
must not, in aggregate, exceed the duty actually paid.
(7)
“The applicable class” means the class of bets to which the relevant
30
provision applies.
(8)
“The duty actually paid” means the general betting duty paid by P
for that accounting period in respect of bets of the applicable class.
(9)
A bet does not count as an “eligible bet” if it was made by or on behalf
of P.”
35

Finance Bill
Schedule 25 — Remote gambling: double taxation relief
566

3
After section 8 insert—
“8ZA
Double taxation relief
(1)
This section applies if a person (“P”) is liable to pay a qualifying
foreign tax in respect of bets in respect of which P is also liable to pay
pool betting duty.
5
(2)
Bets in respect of which P is liable to pay both pool betting duty and
the qualifying foreign tax are referred to as “eligible bets”.
(3)
Credit may be allowed for all or part of the qualifying foreign tax
paid by P.
(4)
Whether any credit is allowed is determined in accordance with
10
Schedule A1.
(5)
If credit is allowed for an accounting period, P is entitled to claim a
repayment of so much of the duty actually paid as is equal to the
amount of credit allowed.
(6)
Total repayments to P for that accounting period (taking into account
15
all qualifying foreign taxes) must not, in aggregate, exceed the duty
actually paid.
(7)
“The duty actually paid” means the pool betting duty paid by P for
that accounting period.
(8)
A bet does not count as an “eligible bet” if it was made by or on behalf
20
of P.”
4
After section 10 insert—
“10A
Definition of qualifying foreign tax
(1)
For the purposes of general betting duty or pool betting duty, a
“qualifying foreign tax” is a foreign tax specified by the
25
Commissioners in relation to that duty (“the relevant duty”).
(2)
“Specified” means specified in a notice published by the
Commissioners, as revised or replaced from time to time.
(3)
The Commissioners must specify a foreign tax under this section if
they are satisfied that—
30
(a)
it is a gambling tax,
(b)
the activities on which it is charged include betting,
(c)
the bets in respect of which it is charged include bets in
respect of which the relevant duty is also charged, and
(d)
the charge in respect of such bets is based on betting by
35
persons in or deemed to be in the country or territory where
the tax is imposed.
(4)
The following factors indicate that a tax is a gambling tax—
(a)
that it is charged on activities involving betting or gaming
(rather than activities generally), and
40
(b)
that it goes towards meeting general public expenditure
(rather than being ring-fenced for a particular purpose).

Finance Bill
Schedule 25 — Remote gambling: double taxation relief
567

(5)
A notice specifying a foreign tax may provide that the tax is to be
treated as having been specified with effect from a date that is earlier
than the date of the notice.”
5
After section 26I insert—
“26IA
Double taxation relief
5
(1)
This section applies if—
(a)
P is liable to pay remote gaming duty on the provision of
facilities for remote gaming, and
(b)
P is also liable to pay a qualifying foreign tax in respect of
remote gaming using those facilities.
10
(2)
The remote gaming using those facilities in respect of which the
qualifying foreign tax is charged is referred to as “eligible gaming”.
(3)
Credit may be allowed for all or part of the qualifying foreign tax
paid by P.
(4)
Whether any credit is allowed is determined in accordance with
15
Schedule 4B.
(5)
If credit is allowed for an accounting period, P is entitled to claim a
repayment of so much of the duty actually paid as is equal to the
amount of credit allowed.
(6)
Total repayments to P for that period (taking into account all
20
qualifying foreign taxes) must not, in aggregate, exceed the duty
actually paid.
(7)
“The duty actually paid” means the remote gaming duty paid by P
for that accounting period.
(8)
Remote gaming does not count as “eligible gaming” if one of the
25
participants in the game in question is P or someone acting on P’s
behalf.
26IB
Definition of qualifying foreign tax
(1)
For the purposes of remote gaming duty, a “qualifying foreign tax”
is a foreign tax specified by the Commissioners in relation to remote
30
gaming duty.
(2)
“Specified” means specified in a notice published by the
Commissioners, as revised or replaced from time to time.
(3)
The Commissioners must specify a foreign tax under this section if
they are satisfied that—
35
(a)
it is a gambling tax,
(b)
the activities on which it is charged include remote gaming,
(c)
the remote gaming on which it is charged includes remote
gaming using facilities in respect of which remote gaming
duty is also charged, and
40
(d)
the charge is based on remote gaming by persons in or
deemed to be in the country or territory where the tax is
imposed.
(4)
The following factors indicate that a tax is a gambling tax—

Finance Bill
Schedule 25 — Remote gambling: double taxation relief
568

(a)
that it is charged on activities involving betting or gaming
(rather than activities generally), and
(b)
that it goes towards meeting general public expenditure
(rather than being ring-fenced for a particular purpose).
(5)
A notice specifying a foreign tax may provide that the tax is to be
5
treated as having been specified with effect from a date that is earlier
than the date of the notice.
26IC
Regulations about claims for double taxation relief
(1)
The Commissioners may make regulations about—
(a)
claims for repayment under section 26IA, and
10
(b)
the making of repayments under that section.
(2)
Regulations under this section may in particular include provision
about—
(a)
the time within which claims may be made,
(b)
the form, content and delivery of claims,
15
(c)
the evidence required to satisfy the Commissioners of the
validity of claims, and
(d)
the investigation and processing of claims.”
6
In section 33 (interpretation)—
(a)
in subsection (1), after the definition of “the Commissioners” insert—
20
““foreign tax” means a tax, including any sort of duty or
levy, imposed in a country or territory outside the
United Kingdom (see also subsection (1B));”, and
(b)
after subsection (1A) insert—
“(1B)
A reference in this Act to a foreign tax does not include any
25
penalty, interest, surcharge or other such cost arising in
connection with the tax (whether or not recoverable as if it
were that tax).”
7
Before Schedule 1 insert—
“Schedule A1
30
Betting duties: double taxation relief
Introduction
1
This Schedule sets out the rules for determining whether credit is
allowed under section 5E or 8ZA for qualifying foreign tax paid by
P.
35
Definitions
2     (1)
This Schedule is to be read as follows.
      (2)
“The applicable class”—
(a)
in the case of section 5E, has the meaning given in that
section, and
40
(b)
in the case of section 8ZA, means dutiable pool bets.