Game on for new tax regime

A new tax regime for businesses operating gaming machines comes into effect on 1 February 2013.

Machine Games Duty (MGD) will be charged where customers pay to play a game on a slot, quiz or other machine in the hope of winning a cash prize which is greater than the cost to play. It replaces both Amusement Machine Licence Duty (AMLD) – an annual charge for making a gaming machine available for play – and standard-rate VAT on net takings. This means tax on machine games will now be entirely linked to takings, rather than including a fixed fee element on all machines.

Bookmakers, casinos, arcades, bingo halls, pubs and clubs and any other premises operating such machines must apply for registration with HM Revenue & Customs (HMRC). Affected businesses that continue to operate machines from 1 February onwards without having applied for registration could face a penalty.

Businesses should apply to register with HMRC as soon as possible if they continue to operate machines for play. The quickest way to register is via its MGD Online Registration Service – visit www.hmrc.gov.uk/machinegamesduty/mgd-online.htm and follow the instructions.

Under the new regime, businesses must keep certain records, including: bank statements; takings records, and relevant business correspondence.

For more information on Machine Games Duty, visit the HMRC website at www.hmrc.gov.uk/machinegamesduty/machine-games-duty.htm

Note for editors

1. There will be two rates of duty for MGD:

- the lower rate at five per cent – for machines where the maximum cost per game on that machine is 10 pence, and the cash prize is £8 or less; and

- the standard rate at 20 per cent – for all other machine games subject to MGD, including those offering several games subject to the duty, where one or more of the games would attract the standard rate.

2. Follow HMRC on Twitter @HMRCgovuk

3. HMRC’s flickr channel www.flickr.com/hmrcgovuk