Value Added Tax Act 1994 section 23

Value of supplies involving relevant machine games

Section 23 explains how the value of supplies is calculated for VAT purposes when a business makes relevant machine games available for play, allowing the supplier to deduct winnings paid out from the total amounts received.

• When a person plays a relevant machine game, the amount they pay is treated as consideration for a supply of services, and the VAT value for a period is the total amounts received minus winnings paid out in that period
• Winnings paid out to the supplier themselves, or to someone acting on the supplier's behalf, are excluded from the deduction
• Tokens are brought within the calculation: inserting a token counts as a payment equal to its purchase price, and receiving a token as winnings counts as a payout equal to its purchase price or exchange value
• Where it is not reasonably practicable to separate payments and winnings between relevant machine games and other games or activities, the allocation must be done on a just and reasonable basis