HMRC have issued a news release (SPEC 18/12) reminding operators of gaming machines that machine games duty (MGD) becomes payable from 1 February 2013.
Those who operate gaming machines liable to duty must register by 11 January 2013.
It should also be noted that landlords, the owner, lessee or occupier of premises, those responsible for the management of premises or for the use of machine games and those responsible for controlling admission to the premises, or providing goods and services to people who are let in may be liable for MGD if the operator does not register.
Registration may be effected online at http://www.hmrc.gov.uk/machinegamesduty/mgd-online.htm.
HMRC’s guidance is at http://www.hmrc.gov.uk/machinegamesduty/machine-games-duty.htm.
The tax is payable in respect of gaming machines where:
• customers pay to play a game on a machine
• there is a cash prize which is greater than the cost to play.
There are two rates of tax
a lower rate at 5% - for machines where the maximum cost per game on that machine is 10p and the cash prize is £8 or less; and
the standard rate at 20% - for all other machine games subject to MGD, including those offering several games subject to the duty, where one or more of the games would attract the standard rate.
Both are levied on the net takings from gaming machines ie what is charged to play the games less the amount paid out as winnings.
There are a number of exceptions for persons such as charities but there are no de minimis limits so a person with a single gaming machine must register.,
MGD replaces both Amusement Machine Licence Duty (AMLD) – an annual charge for making a gaming machine available for play – and standard-rate VAT on net takings. A consequence of the exemption from VAT will be that operators of machines may cease to be liable to register for VAT or, if they have other taxable supplies, may have to apply the partial exemption rules in determining their VAT liability.