Businesses warned over new tax on gaming machines

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An accountant has warned businesses to register for a new tax if they have gaming machines on their premises.

Jonathan Vowles, of Jonathan Vowles Chartered Accountants, in High Street, Cranfield, says the Machine Games Duty (MGD) starts on February 1 but venues should complete the registration process by January 11.

Mr Vowles said: “As with most things there are penalties for getting it wrong!

“The penalty for not registering or making dodgy returns could be a criminal one, in fact the maximum criminal penalty is seven years in jail, or seizing the machines, or a fine.

“The penalty for late registration is a fine of up to 100 per cent of the tax due and there will be a standard penalty even if no tax is due.”

Penalties can be avoided by registering, removing or switching off machines on January 31. People liable for the penalty are property owners, lessees, tenants or occupiers or property manager.

Businesses have to register if gaming machines offer prizes of cash or includes cash or if at least one of the cash prizes is bigger than the smallest amount that is paid to play the game.

Mr Vowles said there will be two rates of duty for MGD. The lower rate of five per cent is for machines where the maximum cost per game on that machine is 10 pence, and the cash prize is £8.00 or less. The standard rate of 20 per cent applies to any machine games that aren’t covered by the lower rate.

MGD is charged on net takings and was introduced in the 2012 Budget.

Details are on the taxman’s website at www.hmrc.gov.uk/machinegamesduty