Clause 20 — Bingo duty

Part of Bill Presented – in the House of Commons at 8:45 pm on 13th May 2009.

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Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 8:45 pm, 13th May 2009

The industry can have any opinion that it likes about the taxation system that applies to it. I am not responsible for the opinions of the bingo industry; it can welcome the measures or not. What I am talking about is the effective tax rate. Prior to the changes that we are suggesting in the Finance Bill, the effective tax rate for bingo consisted of VAT participation fees at 17.5 per cent. and the bingo duty of 15 per cent. Removing VAT fees and increasing bingo duty to 22 per cent. means that the effective tax rate is 22 per cent., not the 24 to 25 per cent. figure that was acknowledged by all sides prior to the Budget, and that featured in the Bingo Association's Budget submission. In fact, the hon. Member for Dundee, East, quoted a 28 per cent. figure last year, but those of us who were involved with the Finance Bill last year will remember that there was widespread acknowledgement that the effective tax rate for bingo, taking the factors that I mentioned into account, was between 24 and 25 per cent.

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rob garrard
Posted on 15 May 2009 3:49 pm (Report this annotation)

the minister is not taking into account the effects that this change will have on the vat reclaimed on purchases by bingo clubs. the treasury was given figures by three independant operators two weeks ago highlighting this and have ignored them. the inability to reclaim the vat on purchases whilst still paying 22% tax on gross profits will hit smaller clubs in particular and discourage investment in the industry.
it is this side of the equation that is causing the damage and yet it has not been mentioned once in the debate.