Government draft law to replace AMLD

25/05/2011

The industry has reacted with horror to the news that the government has launched draft legislation this week pursuing its intention to overhaul AMLD.

BACTA has campaigned hard against the introduction of machine games duty (MGD), which will now be the subject of a second consultation, which will last until July 26, 2011. If, as is expected, the government continues to press for the changes, the new tax regime will come into force in 2013.

“This is the last thing the industry needs at the moment,” says Colin Mallery of Harry Levy Amusements. “We need deregulation not more regulation, we can ill afford the time or the cost of implementing this and there are concerns over what types of machines will be caught up in this new tax regime.”

One of the major concerns over the introduction of MGD is the wider scope of the taxation. Machine games will be classed as “those where customers pay to play a game on a machine in the hope of winning a prize which is greater than the cost to play”. This could catch a large number of machines that are not currently subject to AMLD.

The single levy of MGD is designed to replace the existing amusement machine licence duty and VAT. On May 24, the Government released draft legislation which, if passed, would see an MGD charged on the net takings from the playing of machine games. All machines subject to MGD would become exempt from VAT, and the AMLD would be completely scrapped.

According to our sources, the Treasury has stated that the government believes that changing gaming taxation in this way will improve the future “predictability and sustainability of the tax regime by making it more resilient to technological progress, regulatory changes and to inflation”. Moreover, by exempting machine games from VAT, the government also hopes to bring additional stability to the industry, with machine games becoming subject to the same VAT treatment as other gambling activities.

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