Pubs should get ready for MGD now says BBPA

10/09/2012

With less than two months to go before registration opens, pubs should get ready now for the new tax system for machines – that’s the message from the British Beer & Pub Association, as it publishes new guidance on Machine Games Duty (MGD).

MGD is the new taxation system for gaming and skills with prize machines. It replaces Amusement Machine Licence Duty and VAT on machine income from 1st February 2013. However, pubs should prepare now, says the BBPA, as licensees must register their machines ahead of 1st January. There are penalties for failing to register. Rather than tackle the issue during the busy Christmas period, pubs can register from 1st November, when the registration process opens.

The BBPA guidance covers key questions, such as how the registration process works and how the new tax is calculated. MGD is charged at 20 per cent of net machine takings, and there are associated effects on the amount of VAT that can be reclaimed, which is explained further in the guidance. Pubs should check that their accountant is up to speed with the new MGD taxation regime.

The guidance also highlights the important issue of where responsibility falls under the new system. For managed pub companies, it is the responsibility of the company to register for MGD, whereas for all others, it is the responsibility of the lessee, tenant or freeholder.

BBPA Chief Executive Brigid Simmonds comments: “Our key message is don’t delay, as MGD is now just around the corner. This guidance should help pubs and pub companies in negotiating the new tax system.”

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