Bingo Halls Fight the Bingo TaxTuesday, 29 January 2013 | Written by Tami Bayliss
Back in 2009, bingo hall operators were rocked by the news that the rate of tax on gross profit would be increased all the way up to 22 per cent. Later that year, in December, there was hope on the horizon that things could improve. The government deemed the rise to be too steep and lowered the tax rate down to 20 per cent. The gross profit tax rate had initially been set at 15 per cent before the rise in the chancellor’s budget. As of 2013, bingo hall operators are still disputing the 20 per cent rate because most other forms of gambling just face 15 per cent.
We presently find ourselves entering year five of the dispute, which shows no sign of abating. However, there is some good news, as the Bingo Association has been delighted by the return of an industry powerhouse to the fold. Gala Bingo has taken the decision, in January 2013, to once again become a member of the trade association that represents bingo hall operators. Gala had previously left the association in 2008 and has spent a long time in the wilderness before returning. The hope now is that Gala can help convince the government to lower the gross profit tax rate back to its original 2009 level.
Bingo hall operators are greatly displeased by the fact that pretty much all other forms of gambling in the UK are taxed at a lower rate. What makes the issue even more of a sore-point is that the UK gambling industry is booming, while bingo hall operators are forced to struggle amid higher costs. The issue could get even worse because the government is intent on subjecting bingo hall operators in the UK to an additional tax bill of £9 million for Machine Games Duty.
The Bingo Association and its members are clinging on to hope offered in an industry report produced by international consultancy firm Ernst & Young in June 2012. The firm believes that the number of bingo hall closures in the UK would decline if the government lowered the tax to the same rate as that faced by other gambling operators. At this time, bingo hall operators are just hoping for any ease on costs that they can get because they just want to survive.
In recent years, bingo halls throughout the UK have been closing because they can’t afford to operate in the current economic climate. A major factor within that is the bingo tax that they are subjected to. Online bingo is undeniably the more popular form, but that does not mean that people no longer appreciate a night out at their local bingo hall.
It is hoped that Gala can help take the fight to government and encourage them to lessen the costs faced by hall operators. Over the coming months we will likely learn more as the lobbying continues.