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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.


The BBPA has produced guidance on Machine Games Duty for the pub sector which can be found below along with other information from HMRC including the registration forms most likely to be used by pubs. Please note you can also register online at HMRC (website below) For member queries on MGD please contact Jim Cathcart, Senior Policy Adviser, 020 7627 9144


Resources

» Online registration (HMRC)
» HMRC Advice on Registration after January 11 2013
» BBPA Guidance for Pub Operators - MGD
» MGD Form 1 - apply for Machine Games Duty registration
» MGD Form 2 - to provide details of Machine Games Duty partners
» MGD Form 3 - to apply for group treatment for Machine Games Duty
» HMRC Online Registration Guide
» HMRC Step-by-Step Registration Guide