Pubs could face heavy taxes under new gaming machine proposals

Under proposed changes issued by the Treasury this week, all machine games would become exempt from VAT and would instead be liable for Machine Games Duty (MGD).

However, according to the BBPA, the measures would mean many pubs would be unable to afford to keep game machines, and would lose what has long been a traditional part of their income and a popular entertainment for their customers.

The trade group is calling for pub machines to be taxed at the lower of the two new proposed duty rates, and said it would lobby for a “fair deal” for pubs.

Pub machine income​

“Many pubs could lose a vital part of their income under these proposals. (…) We will be pressing the Treasury for a rethink that ensures a fairer set of proposals,” said Brigid Simmonds, chief executive of BBPA.

Under the new proposals, MGD would be charged on net cashbox and it is proposed there will be a standard rate and a lower rate, based on stake/prize levels.

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BBPA said the system is likely to be “costly and complex to operate”.

“Pubs will lose a well understood system, and will have to register on-line to comply with Treasury rules under the new tax,” said the lobby group.

“The new system would be an accountant’s dream but a publican’s nightmare.”

The proposals are due to be introduced through the Finance Bill 2012 and come into effect in early July 2013. The Treasury is consulting on its proposals until 26 July.

Illegal gaming machines​

Meanwhile, pubs are also being urged to check that their gaming machines are not operating illegally, following a crackdown by police.

The Gambling Commission has reported that police have seized gaming machines and related equipment from licensed premises.

This follows a national operation focusing on the illegal manufacture and supply of such machines. These included Amusements With Prizes machines (AWPs) presented as Skills with Prizes machines, contravening the November 2010 agreement with HMRC with regard to the definition of skill machines.

“Pubs need to be aware, so they are not caught out, as the Gambling Commission is determined to see these new rules enforced. It is possible that some of these machines have inadvertently found their way into pub premises, so pubs do need to double-check, to protect themselves,” said Simmonds.