Machine Games Duty (MGD) comes into force on the 1st February 2013 and will replace Amusement Machine Licence Duty (AMLD) and VAT on machine income.
MGD applies to a wide range of machines, including Jackpot, AWP (fruit) machines and SWP (quiz) machines. SWPs are not currently liable for AMLD.
MGD is payable on all machines where the prize is greater than the stake. If the stake is over 10p or the cash prize is over £8 – the rate for MGD is 20% of the net cashbox.
Machines with a stake of 10p or less and a prize of £8.00 or less attract a 5% rate.
You must register machines for MGD between 1st November 2012 and 1st January 2013.
If a machine is installed after 1st February 2013 you must register at least 14 days before the machine is made available for use.
Liability for the tax will rest with the tenant/lessee or independent operator in the case of tenanted/leasehold or freehold pubs. For managed companies, liability will rest with the pub operating company. Companies/operators will need to be registered for MGD ahead of implementation; registration opens on 1 November 2012 and runs until 1 January 2013.
You can register online or by post.
You need to check your position in relation to Machine Games Duty and be aware of any implications the change in legislation may have on your VAT status.
After 1st February 2013, a quarterly online or paper return must be completed.
Further guidance and more details are available on http://www.hmrc.gov.uk/machinegamesduty/ or the BBPA website at www.beerandpub.com/mgd