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Gaming Machines

Machine Games Duty – Guidance for Pub Operators


Machine Games Duty replaces the current taxation regime for ALL gaming machines (Amusement Machine Licence Duty and VAT) from 1 February 2013 if the machine offers a cash prize.

This will result in machines becoming VAT exempt and becoming liable to a tax on net cashbox at the following rates:

20% rate – machines with a stake over 10p and prize over £8 (in effect Category C ‘fruit’ machines and Skill with Prize machines – note SWPs are now liable for MGD despite not currently being liable for AMLD)

5% rate – machines with a stake 10p or less, and prize £8 or less (in effect Category D machines)

Liability for the tax will rest with the tenant/lessee or independent operator in the case of tenanted/leasehold or freehold pubs. For managed companies, liability will rest with the pub operating company. Companies/operators will need to be registered for MGD ahead of implementation; registration opens on 1 November 2012 and runs until 11 January 2013.

AFTER 11 JANUARY 2013 – If you apply for MGD registration immediately, HMRC may be able to process your application in time and you may avoid a penalty for late registration. From 1 February, if you offer machines for play on premises and you are not registered you may be liable to a penalty even if no tax is owed. Applying for registration before the 1 February will make it less likely that a penalty will be due.

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