A lack of preparation for a forthcoming tax could see as many as 30,000 pubs being slapped with substantial fines, as HMRC notes that only 353 affected watering holes have signed up to the Machine Games Duty (MGD).
According to estimates from the British Beer & Pub Association (BBPA) the number of pubs registered for MGD is less than 2% of the 30,000 that it expects will be impacted by the duty and should be getting in touch with the taxman to avoid the potentially crippling penalties.
Fines of between 30% and 100% of unpaid tax can be handed out by HMRC, to non-compliers with the more severe fines being given where the taxman understands there to be more intent in avoiding paying the duty.
MGD is set to replace the Amusement Machine Licence Duty (AMLD) for providers of arcade and amusement machines from 1 February 2013 and registration for the new duty - in time for the implementation date - closes on 11 January next year, having been recently extended from the original 1 January date.
Most significantly, MGD will see the introduction of two alternative tax rates; 20%, where the stake is higher than 10p and has a prize exceeding £8, or 5%, where the stake is 10p or less and a prize of no more than £8.
The new rules will mean that machines known in the industry as ‘skills with prizes’ (or SWPs) will now be liable under the higher MGD rate, where as previously under AMLD they were exempt.
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