Takings from a game played on a machine for a prize is subject to Machine Games Duty (MGD). Check what you need to pay it on, how to register for MGD, and how to file a return or change your details.
MGD is a duty of excise charged on playing different types of 'dutiable machine games' in the United Kingdom.
As a rule, having machines on your premises that give cash prizes means you must pay Machine Games Duty. You pay MGD on installed and portable types of:
Not all game machines are subject to MGD. For example, the excise duty would not be liable on machines where the prize won has less value than the cost of playing.
Likewise, you do not pay MGD on the takings from charity events, on lottery machines, tournaments, or gaming machines used for domestic use.
The person with the responsibility for Machine Game Duty needs to register. The same person must send regular returns, pay any duty of excise owing, and keep proper records.
Note: Takings from machine games is exempt from VAT if you pay MGD. A guide explaining Machine Games Duty (MGD) is also available in Welsh language (Cymraeg).
You have the responsibility to register for, and pay, Machine Games Duty, if you hold any of these licences:
A different set of Machine Games Duty rules apply for the tenant of a pub. As the tenant, you are responsible for MGD. The premises licence owner is not liable - usually the owner of the pub. So, you would need to cancel your registration if you stop being the tenant.
Note: As a rule, supplying the machines does not make you responsible for MGD. An exception applies if you also hold the licence or the permit for the premises.
What happens if the premises does not have a licence? In this case, HM Revenue and Customs will ask someone else to register for MGD and pay the duties. Often, the person HMRC ask will be the manager or the owner of the premises.
Not registering for Machine Game Duty in United Kingdom when you should can result in a financial penalty.
You must register for MGD at least fourteen (14) days before making the machines available to play. One method is to add MGD to your HMRC account. You would need to create an account as an organisation if you only have a personal tax account.
To register for Machine Games Duty you will need:
You must keep accurate records after you have registered for MGD. The records must show how you worked out the figures for your return and that the amount you paid is correct. You need to keep records for Machine Games Duty on file for four (4) years in case HM Revenue and Customs want to inspect them.
You can inform HM Revenue and Customs that you want to register a business for Machine Games Duty using the MGD1 form. Fill in the registration form if you prefer to file the paper returns.
You need to pay Machine Games Duty on the total net takings from all the machine games. The net takings is the amount you charge to play the games less the amount that you pay out as winnings (includes non-cash prizes).
|Type of Gaming Machine||Cost to Play||Prize Money||MGD Rate|
|Type 1 (lower rate)||Up to 20 pence||Up to £10||5%|
|Type 2 (standard rate)||21 pence to £5||£11 or more||20%|
|All others (higher rate)||More than £5||Any||25%|
Some games machines allow for several types of game on one machine. In this case, you pay the MGD rate for the highest rated game on all takings from that particular machine.
You have a machine that plays 5 different games costing 20 pence to play and one game that costs £6 to play.
In this example you would pay 25% on the net takings from the machine. Thus, if the net takings are £200 you would pay £50 MGD.
Anyone registered for Machine Games Duty must file a return every three (3) months. The MGD deadline for a return is within 30 days of the end of the accounting period. HMRC will send you a reminder by email (if they have your email address from the online registration).
Note: You should still fill in the return even if you do not owe any duty of excise (entering a '0' in all the boxes).
Having filed your return you will then need to Pay Machine Games Duty within thirty (30) days of the end of your accounting period.
Machine Games Duty late filing can result in a financial penalty on top of an estimated bill from HMRC.
As a rule, you will receive the paper forms sent by HM Revenue and Customs before your return is due. But, you should contact the gambling duties helpline if you do not get the forms.
Gambling Duties: Online Helpdesk
Telephone: 0300 200 3701
Textphone: 0300 200 3719
Outside UK: +44 2920 501 261
Monday to Friday: 8am to 6pm
Closed weekends and bank holidays.
Excise Processing Teams
Once you sign in to the Machine Games Duty online service you will be able make changes, such as:
Note: You would need to tell HMRC your registration number if you choose to contact them by telephone or by postal methods.
You can sign in and add the MGD service if you already set up an HMRC online account. If not, you would need to register for an HMRC account and then sign up for the MGD account.
Machine Games Duty (MGD) in the United Kingdom