Machine Games Duty - A change in the taxation of revenue from gaming machines

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Here our Licensing team outlines ten things you need to know...

  1. Currently operators of gaming machines pay Amusement Machine Licence Duty (AMLD), but from the 1 February 2013 AMLD is being replaced with Machine Games Duty (MGD) and there is a need for operators to act now.
  2. MGD is payable on any machine where the prize is cash or includes cash and at least one of the cash prizes is greater than the smallest stake.
  3. Operators need to register with the HMRC before 1 January 2013 and can do so from the 1 November 2012 on-line or by post.   If you do not register you cannot operate a machine on which duty is payable after 1 February 2013.
  4. MGD is a tax on the net takings of a machine, ie the stakes played less the winnings paid out.
  5. There are two rates of tax: 5% for machines with a maximum stake of 10p and maximum prize of £8.
  6. MGD returns will need to filed with HMRC every three months from 1 February 2013 and within 30 days after the expiry of the three month period.  You can request that the return period is changed but this is at the discretion of HMRC and the discretion limited.
  7. Any machine on which MGD is payable is VAT exempt.
  8. If you operate more than one machine and one makes a loss you can offset the loss against the net takings of the other machine/s.
  9. Guidance notes have been issued by the British Beer and Pub Association.
  10. Visit HMRC's dedicated on-line portal.