I Have been doing the books for a public house, now since MGD was brought in in February every article I see and every conversation I have with people shows me everyone seems to be under a different impression of how to deal with MGD and vat so hoping I can get a definite answer on here.
The situation is the company that provides the games machines gives a collection note/invoice to the pub owner which gives a breakdown of the net takings, the mgd and the rental, so for example
Net takings 20.00
MDG 4.00
Rental 10.00
vat on rental 2.00
amount to pub landlord 8.00
Now my question is why is the machine operator showing vat on the rental as I had read and as I understand it that since mgd was introduced games machines are now exempt from vat, therefore if it is exempt you can not reclaim vat on the rental, is this correct? if it is correct why are the operator companies still showing vat on rental?
Second question some machines are lottery machines which do not come under mgd along with juke boxes. Is vat payable on the income from the lottery machines or are all games machines now exempt from vat? Surely all income for the company is vatable?
Help on this would be appreciated as every person I speak to has a different stance on this
I'll answer the first. My understanding is that it is only the machine which is VAT exempt, not the rental fee. In this case the invoice is correct. Your client wont pay /vat on the £20 takings, but will on the rental.
Thank you for your reply and the link, I have read all these HMRC notices before but you need a degree in rocket science to understand them, lol. Am I right in thinking that the income from the Lotto machines are vat exempt? therefore no vat to pay on income from these machines?
