Machine Games Duty – one operator’s fight


Do you feel like you spend more and more time fighting threats to your business, when that time could be much better spent on the business? Graham Rawlinson of GJR Leisure in Southend on Sea is typical of operators all over the UK in his fears over the Machine Games Duty, however, he is doing everything he can to fight it.

Graham asked his accountant to look into the new tax and his findings set out in a letter were stark, “The proposals are that you will not be required to pay licenses and the Machine Games Duty would be charged on the net machine takings at a rate of 29%.  Currently you pay your AMLD licenses and 20% VAT on the net machine takings,” he said. On Mr. Rawlinson’s turnover, his accountant estimated that the amount of payable would rise by almost 50 per cent under MGD.

“However, my other major concern with the proposal is that the income will be treated as an exempt of VAT income and therefore as far as I can see from those proposals, the machines which are used to generate that income would also fall as being exempt under the VAT legislation.,” continues the letter.

“The impact of that on your business and any similar business would be that the input VAT which you are currently able to reclaim on the purchase on new machines would be lost.  However there is the proviso here that, of course, if the income generated by these machines is exempt, then the sale of the machines to businesses should also be exempt.  However form the proposal it is not clear on this point as far as I can see.”

The accountant concludes, “It would appear that these proposals which were, of course, originally drafted by the previous Government would be detrimental to the business and would merely act as a way for the Government to increase its takings from an area of the economy which has suffered significantly both during the recession and from previous changes brought in by the previous Government under the Gaming Act.  It would appear that if possible, these proposals should be fought vociferously as I can see no benefit to the business which would arise from such a change only a significant loss of income.”

Graham is trying to be as vociferous as possible. “I have had many discussions with my accountant and he has alerted the British Legion clubs he has as clients and I have tried to talk to ABB as I feel we need the betting shops with us as colleagues not adversaries,” he says. “This letter has been shown to our MP by a licensing consultant who I and two other arcade owners have hired as he can talk using his head not as I would from the heart.”

Do you have similar stories regarding your fight against MGD and concerns over how the new system will affect your business. If so, please let us know.



Comments (1)

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Good points made but am interested to know where your accountant got the 29% figure from.
As I’m afraid if it’s pitched at that sort of rate we might as well shut up shop because there will be nothing left for us.

Michael Webber
North Wales
22/06/2011, 22:24

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