The Rank Group has responded to HM Treasury's consultation on proposals to replace the existing taxation regime for gaming machines with a gross profits tax. HM Treasury has stated that it intends any changes to gaming machine taxation to be revenue neutral for the Exchequer, although this does not necessarily mean that its impact would be neutral for Rank.  

The submission confirms Rank's previously stated view that gaming machine GPT would need to be set at a rate of 15% in order to be neutral for the Group. This level of taxation would be consistent with the current rates of general betting duty (sports betting), remote gaming duty (internet betting and gaming), football pools duty and the starting rate of casino gaming duty. Rank's calculations have been validated by Ernst & Young LLP.

The submission also confirms Rank's analysis of the effects on Group profits should GPT be set higher than 15%. Rank estimates that it would incur at least £1 million per annum in additional taxation for every percentage point over the 15% neutral rate. Within Rank, these costs would mainly be borne by Mecca Bingo. Given the damaging effects of the recent increase in bingo duty (from 15% to 22%), Rank's submission urges the Government not to increase further the tax burden of what is already the most heavily taxed gaming sector in Britain.  (E-10.23.09)

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