Game on for new tax regime
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01 February 2013 - HM Revenue
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.
1. There will be two rates of duty for MGD:
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
- 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;
- 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
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Article Published/Sorted/Amended on Scopulus 2013-02-06 09:02:08 in Tax Articles