Machine Games Duty

What is Machine Games Duty
MGD replaced AMLD, and where MGD is payable you don’t have to pay VAT on machine takings.
MGD is charged on the playing of dutiable machine games where customers pay to play the games in the hope they will win a cash prize that’s more than the cost to play the machine.

Rates of MGD
There are two rates of duty for MGD:
1. standard rate at 20% – the standard rate applies to any machine games subject to MGD, that aren’t covered by the lower rate
2. lower rate at 5% – the lower rate is for machines where the maximum cost per game on that machine (the ‘maximum stake’) is 10 pence, and the cash prize is £8.00 or less.

Who needs to register and pay Machine Games Duty
You’ll need to register with HM Revenue & Customs (HMRC) for MGD and pay the duty if you hold the relevant licence or permit.

Relevant licences or permits are:

  • premises licence for gambling activities under the Gambling           Act 2005
  • family entertainment centre gaming machine permit
  • club gaming permit
  • club machine permit
  • prize gaming permit
  • Licensing Act (England and Wales) 2003 premises licence for sales of alcohol, and the equivalent under the Licensing (Scotland) Act 2005 – however in the case of a tenanted pub, where the licence is held by someone other than the tenant, the tenant will nevertheless be a person liable to register for MGD club premises certificate granted under Part 3 of the Licensing Act 2003)

Registering for Machine Games Duty
If you have dutiable machine games you’ll need to register for MGD with HMRC. As a general rule, you’ll need to do this at least 14 days before any machines are available to be played.

Group registration
Two or more corporate bodies (that is companies or partnerships incorporated through Companies House), can ask to be registered as a group.

How to register for Machine Games Duty
HMRC’s MGD Online Registration Service is available online at HMRC: www.hmrc.gov.uk/machinegamesduty/registering.htm
There is also a form ‘MGD1’ that can be downloaded from HMRC.

Agents
You can appoint an agent to deal with your MGD affairs.
The MGD for agents service will enable agents to:
1. set up client authorisations online
2. make changes to clients’ MGD registrations (change of premises and address)
3. view clients’ accounts
4. submit returns on their clients’ behalf
HMRC will not discuss your personal or financial information with an agent if they haven’t been authorized.

Kenclub Equipment is registered with HMRC as Agents.

Useful Links.
www.hmrc.gov.uk/machinegamesduty/machine-games-duty.htm
www.hmrc.gov.uk/machinegamesduty/mgd-online.htm
www.hmrc.gov.uk/machinegamesduty/registering.htm