BBPA: pubs can’t take MGD over 15%

08/08/2011

The British Beer & Pub Association (BBPA) has called on pubs minister Bob Neill to intervene over proposed tax changes to fruit machines in pubs, reports the Publican’s Morning Advertiser.

The trade association predicts that the implementation of the new proposed banding system for machine games duty (MGD), could cost the trade £11.9m a year or £200 per pub in compliance costs.

The BBPA is pressing Bob Neill for the full financial impact on the pub sector to be assessed before any decisions on the new regime are made by Treasury ministers.

In its submission to Treasury consultation the BBPA has reiterated calls for a lower tax rate for category C (amusement with prizes) machines, claiming any tax rate above 15% will penalize the greater majority of pub businesses and will hit smaller pubs hardest.

The Treasury has also indicated it may consider two bands for gaming machines, but the BBPA has questioned whether two bands is enough with the range of different machine types. If the two-tier system is not adopted the BBPA argues there should be three bands within Category C, with pubs placed into a middle band and taxed at 15%.

Brigid Simmonds, chief executive of the BBPA, said: “The current system is working well and is well understood by tenants and licensees. We are disappointed that the Treasury seems determined to plough ahead with these unwelcome and unsettling changes, but if they do they must ensure that they do not hit pubs’ bottom line.

“Gaming machines are still a significant source of revenue for many cash- strapped pubs. Introducing a more complicated new tax regime for machines flies in the face of a coalition commitment to cut red tape. It is vital that the new tax adds no additional net costs to pubs.”

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