Machine Games Duty

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1. Overview

You may have to pay Machine Games Duty (MGD) if you have machines that give cash prizes (such as slot, fruit or quiz machines) on your premises.

This guide is also available in Welsh (Cymraeg).

You do not pay the duty on any of the following:

  • machines where the prize is less than the cost to play
  • takings from charity events, tournaments or lottery machines
  • machines for domestic use

Takings from machine games are exempt from VAT if you pay Machine Games Duty.

Who must register and pay

You鈥檙e responsible for registering, reporting and paying Machine Games Duty if you鈥檙e the current holder of any of the following for the premises:

  • licence for gambling or to sell alcohol
  • family entertainment centre gaming machine permit
  • club premises certificate
  • club gaming or machine permit
  • prize gaming permit or amusement permit
  • club registration certificate
  • bookmaking office licence or bingo club licence

There are different rules if you鈥檙e the tenant of a pub. You鈥檙e responsible for Machine Games Duty, rather than the premises licence owner (usually the pub鈥檚 owner).

If the premises is not licensed, it is usually the manager or owner who must register. You鈥檙e not responsible for the duty if you only supply the machines.

What you must do

If you鈥檙e responsible for the duty you must:

  1. Register for Machine Games Duty before you make your machines available to play.

  2. Work out what you owe and send HMRC a return every 3 months.

  3. Pay what you owe within 30 days of sending a return.

  4. Keep records of the takings from your machine games and your returns for 4 years.

If you stop being responsible for the duty, for example, your pub tenancy ends or you remove the machines, you must cancel your registration. If you do not cancel, HMRC will continue to send you requests for returns and payment based on estimates of what you owe (known as 鈥榗entral assessments鈥�).

You may have to pay a penalty if you do not register when you should.

2. Register

Register for Machine Games Duty (MGD) at least 14 days before you make your machines available to play.

You must have an HM Revenue and Customs (HMRC) business tax account to register. If you do not have one, you can .

Once signed in, to register for Machine Games Duty you鈥檒l need:

  • any licence or permit numbers for your premises
  • your Unique Taxpayer Reference (UTR), if you鈥檙e registered for Self Assessment or Corporation Tax
  • your VAT number, if you鈥檙e registered for VAT
  • your National Insurance number
  • to know how many machines you have
  • your accountant鈥檚 Machine Games Duty agent reference number and postcode, if you want them to file returns on your behalf

If you include your email address when you register you鈥檒l get reminders when your returns are due.

If you want to file paper returns

Fill in and send the registration form if you want to file paper returns.

After you鈥檝e registered

You鈥檒l need to:

  • work out what you owe and file a return every 3 months
  • keep your returns, receipts of your machine takings and details of your calculations for 4 years

3. How much you pay

You pay Machine Games Duty (MGD) on the total net takings from your machine games.

This is what you charge to play the games minus the amount you pay as winnings, including non-cash prizes.

You do not pay it on takings from charity events, tournaments, lottery machines or if the machine is for domestic use.

Machine Games Duty rates

Cost to play Prize Rate you pay
Machine type 1 - lower rate 20 pence or less 拢10 or less 5%
Machine type 2 - standard rate 21 pence to 拢5 拢11 or more 20%
All other machine types - higher rate More than 拢5 Any 25%

If your machine has more than one type of game, you pay the rate for the highest rated game on all takings from the machine.

Example

If your machine has 5 games that cost 20 pence to play, and one that costs 拢6 to play, you鈥檇 pay 25% on your net takings from the machine. So if your net takings are 拢400 you鈥檇 pay 拢100 in duty.

4. File your return

You must file a Machine Games Duty (MGD) return every 3 months.

Your return is due within 30 days of the end of the accounting period.

You鈥檒l need:

  • records of your total net takings from machine games
  • details of how you worked out the figures

You must still send a return even if you do not owe anything, or your business has not traded during the accounting period for any reason. Enter 鈥�0鈥� in all boxes.

If you chose to file using paper forms

HM Revenue and Customs (HMRC) will send you paper forms when your return is due. If you do not receive them, contact the helpline.

After you鈥檝e filed your return

Pay your Machine Games Duty bill within 30 days of the end of your accounting period.

You may have to pay a penalty if your return or payment is late. HMRC can also charge you an estimate of what you owe.

You must keep your returns, receipts of your machine takings and details of your calculations for 4 years.

5. Change your details or cancel your registration

to:

  • update your personal details
  • cancel your registration, for example if you鈥檙e no longer responsible for the duty, you remove the machines or you stop trading
  • register as part of a group of companies rather than individually
  • add, change or remove an agent authorised to file returns for you

You can also contact HM Revenue and Customs (HMRC). You鈥檒l need to tell them your registration number.

Switch to file online instead of sending paper returns

If you already have an HMRC online account, .

Otherwise, and sign up for Machine Games Duty.