Slow Take-up by Pubs of Machine Games Duty
03 December 2012
The new Machine Games Duty (MGD) is set to replace the Amusement Machine Licence Duty (AMLD) for providers of arcade and amusement machines from 1 February 2013.
MGD will see the introduction of two alternative tax rates:- 20%, where the stake is higher than 10p and has a prize exceeding £8
- 5%, where the stake is 10p or less and a prize of no more than £8.
The new rules will mean that machines known in the industry as ‘skills with prizes’ (or SWPs) will now be liable under the higher MGD rate, whereas previously under AMLD they were exempt.
According to HMRC, only 353 affected establishments have signed up for the new MGD, approximately 2% of the total. HMRC has extended the deadline to register to 11 January 2013 to allow businesses more time to register after their busy holiday period.
Fines of between 30% and 100% of unpaid tax can be handed out by HMRC, to non-compliers with the more severe fines being given where the taxman understands there to be more intent in avoiding paying the duty.