Further gambling duty update

Stephen Hignett, Tax Partner, CMS
So what does it say in the fine print of the Budget Press Release about the changes to gambling duties?  Not a huge amount, but here’s the gist of it:

– Machine games duty (MGD) will come into force on 1 February 2013 (and, at the same time, AMLD will be abolished and gaming machines will come within the VAT exemption for gambling). The standard rate of MGD will be 20% and the lower rate 5%.  The standard rate is higher than the “break even point” that most had been hoping for.  But should we be surprised by that?  Whilst I can remember many occasions when we’ve waited, with baited breath, for a new gambling duty rate to be announced by the Chancellor, I can’t remember many occasions when the rate that has been announced has been equal to, or lower than, the rate the industry had hoped for.�

– The place of consumption tax is, as we know, now to be consulted on in a more formal manner than last year.  Buried deep in the Budget Press Release is a statement that the new rules are intended to be introduced in December 2014.   This is what we predicted in the article that we circulated yesterday.  Please let me know if you haven’t received a copy and would like one.   Perhaps the 20% rate for MGB augurs badly for the rate of a new POC duty?

5 thoughts on “Further gambling duty update”

  1. What you don’t make clear to your readers is whether the machines tax replaces AMLD/VAT or is additional to AMLD. Pretty important.

  2. Yes good point! As previously announced, the new MGD will replace the current regime of AMLD plus the VAT charge on the takings of gaming machines. So AMLD will be abolished and the VAT exemption for gambling will be widened so that gaming machines now fall within it.

  3. Quite so, but you state in your Budget update that machines will NOT be moved into the VAT exemption for gambling!

    1. Dear Leighton. That, I’m afraid, is a horrible typo – which we are in the process of fixing. “Not” should read “now”. To be clear, MGD is effectively “replacing” VAT and so gaming machines are “now” being moved within the VAT exemption. Thanks for spotting that and apologies for the misunderstanding.

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