Pub tenants and lessees will be responsible for new machine games duty

The Machine Games Duty (MGD) is the new taxation system for gaming and skills with prize machines. It replaces Amusement Machine Licence Duty and VAT on machine income from 1 February 2013.

For managed pub companies, it is the responsibility of the company to register for MGD.

The BBPA urged licensees to get ready now to avoid penalties, and make sure that their accountants are up to speed. Registration opens on 1 November and the BBPA advised licensees to get it done early instead of tackling the issue during the busy Christmas period. Pubs must register before 1 January 2013.

The guidance also covers key questions such as how the registration process works and how the new tax is calculated. MGD is charged at 20% of net machine takings, and there are associated effects on the amount of VAT that can be reclaimed.  

BBPA chief executive Brigid Simmonds said: “Our key message is don’t delay, as MGD is now just around the corner. This guidance should help pubs and pub companies in negotiating the new tax system.”

A pdf of the guidance is available here.