Only 1% of pubs register for machine games duty

By Michelle Perrett

- Last updated on GMT

Related tags: Machine games duty, Tax, Game, License, Hmrc

Machine Games Duty warning from BBPA for pubs
Tens of thousands of pubs could face penalties if they fail to sign up to the new machine games duty (MGD) before the end of 2012.

HM Revenue & Customs (HMRC) has revealed that only 353 pubs have successfully registered for the new tax system but it has been estimated by the British Beer & Pub Association (BBPA) that more than 30,000 pubs are expected to be affected by the new regime, which comes into force next February.

Licensees can be charged a penalty of between 30% and 100% of any unpaid tax. The higher penalties are charged if HMRC believes the tax avoidance was deliberate.

MGD will replace both amusement machine licensing duty — the annual charge for making a gaming machine available for play — and standard-rate VAT on net takings.

Trade associations are concerned about the low registration numbers and the lack of awareness among licensees, especially in the lead-up to the busy Christmas period.

A BBPA spokesperson said: “This very low level of registrations is clearly a concern — more than 30,000 pubs need to register, but it appears only around 1% have completed the process so far.
“HMRC certainly needs to do all it can to raise awareness in the short period of time left before the deadline for registration expires — we have guidance to help licensees register on our website at

“Given that awareness of the new system is clearly a concern, we hope that HMRC will focus on getting the word around rather than looking to levy penalties — but pubs still need to
be aware that penalties could happen.”

Kate Nicholls, strategic affairs director of the Association of Licensed Multiple Retailers, said: “A lot of licensees are not sure about the timetable. It can take about two weeks to register if there are any problems with the registration. You can’t do it at the last minute.”

For more information on machine games duty, visit the HMRC website at

Who will have to pay MGD?
Those paying MGD will hold a relevant machine game licence or permit, or be the operator of the premises.
It will be payable where customers pay to play a game on a machine in the hope of winning a cash prize that is greater than the cost to play. There will be two rates of duty for MGD: the 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.
HMRC urged hosts to sign up by 1 January, with 11 January the final cut-off date. It is not obliged by law to process applications after 11 January.

Related topics: Legislation

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