Last year the Government announced its intention to replace Amusement Machine Licence Duty and VAT on Category C Fruit Machines and skills with prizes machines delivering a prize of over £8.00 with a Machine Games Duty. This tax will mean that licensees will have an additional administrative burden as they will need to complete a return every quarter.
It had been hoped by the industry that the level that MGD was set at would be tax neutral, reflecting the increase in work, so that it would not be an additional cost and burden to those for whom fruit and quiz machines are a vital source of income. However, in another blow to the industry the Government announced in the recent budget that the rate would be set at 20%. Many believe this is too high and may lead to the closure of many amusement arcades. The new tax will be introduced from 1 February 2013.
For further information on when and how to register for MGD see the HMRC guidance note
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.