Businesses operating gaming machines on their premises are reminded to ensure that they are registered for the new machine games duty (MGD), which will come into effect on 1 February 2013.
Machines subject to MGD – those in which the cash prize offered is greater than the cost to play the game – will be liable for duty, but income from that machine will become VAT exempt.
MGD will replace both Amusement Machine Licence Duty and VAT on machine games and will be charged on the net takings from the machine game.
There will be two rates of MGD:
- the lower 5 per cent rate will apply to machines with maximum stakes of 10p and maximum cash prizes of £8
- the standard 20 per cent rate will apply to all other dutiable machine games
Businesses affected by the new charge must be registered by 31 January 2012 or risk incurring HMRC-imposed penalties.
We can help you register for machine games duty. Please contact us.