Machine Games Duty (MGD) was introduced on 1 February 2013. MGD is charged on the net takings from the playing of machine games. Machine games are games played on a machine where customers hope to win more than they stake.

There are currently three rates of MGD.

  • The lower 5% rate applies to machines with maximum stakes of 20p and maximum cash prizes of £10.
  • The standard 20% rate applies to other dutiable machine games where the cost to play every dutiable machine game on the machine once does not exceed £5.
  • The higher 25% rate of MGD applies on any machine where the maximum stake exceeds £5 and the machine is not liable to the standard or lower rate.

HMRC’s Excise Notice 452: Machine Games Duty explains how MGD is charged and who is required to pay it. The notice has recently been updated. There have been changes to the sections titled ‘who should register’, ‘when must I make a return’ and ‘paying
too much duty by mistake’. Where MGD is payable, it replaces both Amusement Machine Licence Duty and VAT.

Source: New feed