Machine Games Duty (MGD) has replaced Amusement Machine Licence Duty (AMLD), and where MGD is payable you don’t have to pay VAT on machine games.
A machine game is dutiable if both the following apply:
There are two rates of duty for MGD:
If you have dutiable machine games you’ll need to register for MGD with HMRC. You’ll need to do this at least 14 days before any machines are available to be played. This can be done online using the MGD Online Service, or by completing a form MGD1 which can be found at the following http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=vDXRq_4kUMA&formId=7068
Information you’ll need to hand before you register:
Once HMRC has accepted and processed your online application, you’ll be placed on the MGD register and receive your MGD registration number. You will be able to view it online and a copy will be sent to you in the post. You can appoint Curle & Co as agent to deal with your MGD affairs. If you wish us to act as agent for your MGD affairs please inform us.
MGD is due on the total net takings from the playing of dutiable machine games. Net takings means what is charged to play the games less the amount paid out as winnings. You can treat as winnings (and deduct from MGD liability) the VAT inclusive cost of non-cash prizes given out for play on machines subject to MGD (that is machines which also offer a cash prize more than the cost to play the game). In this case, you must not deduct the value of non-cash prizes until they are actually given out to the winners.
Once you’re registered for MGD you must send HMRC regular returns and payments. The standard accounting period will be three calendar months. Your MGD return should be with HMRC 30 days after the end of the accounting period. It will need to give details of the net takings from dutiable machine games
Once you have signed up to use HMRC’s MGD Online Service you’ll be able to submit any subsequent returns online. If you have not signed up to use HMRC’s MGD Online Service, you will need to submit a paper return (MGD 6). HMRC will issue a paper return after the end of each accounting period and this must be sent to HMRC by the 30th day following the end of the accounting period.
You’ll be able to pay MGD electronically by:
You have a legal obligation to submit your MGD return and pay any MGD you owe to HMRC by the due date. If this date has passed and you haven’t submitted your return, HMRC will calculate what you owe using the best information available to them. This calculation is called an ‘assessment’. Therefore to ensure that you pay the correct amount at the correct time it is important that you submit your return by the due date.
Penalties are applicable if: