Double tax take could mean number's up for bingo clubs

[BingoT]

Double tax take could mean number's up for bingo clubs
By Alistair Osborne

Britain's leading bingo operators have warned Chancellor Alistair Darling that the Treasury will be out of pocket unless it scraps VAT on products at their clubs.

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In a letter signed by the industry's most senior executives, the operators warn that the ongoing double-tax regime for bingo risks club closures and a consequent decline in tax take for the Treasury.

advertisement"Based on current projections, the net cost of removing VAT at this point is likely to be revenue positive to the Government when compared with the cost of clubs closing," the executives say in the letter signed by eight bingo chiefs, including Rank boss Ian Burke and Gala head Neil Goulden.

The letter, which accompanies the industry's submission to the Treasury ahead of this year's Budget, is part of its campaign to address the "unfair" tax treatment of bingo.

Bingo is "the only mainstream gambling product to be subject to double taxation in the form of gross profits tax (GPT) and VAT", the letter stresses.

The bingo industry employs some 17,000 people in around 600 clubs, with about 3m people playing regularly.

The smoking ban and a cut in the number of permitted £500 jackpot machines have triggered a severe profits warning from Rank and are putting smaller club owners at risk.

The Bingo Association believes one in three clubs could close if the Government refuses to reform the tax regime.

"Since the industry first identified 189 marginal clubs in 2005, 81 have closed, leaving 108 still at risk," the letter says. "The cost of each bingo club closure to the Treasury in lost revenue is likely to be at least £700,000 per annum."

Rank calculates that each of its 102 clubs contributes £1m to the Exchequer, including such things as VAT, GPT and corporation tax.

It pays around £8m a year in VAT, but closing just 10pc of its clubs would cost the Treasury more than £10m.