When to Pay Dutiable Machine Game Duty
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:
- Quiz machines and other ‘skill with prize’ machines.
- Slot and fruit machines (and certain other gaming machines).
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).
Who is Liable for Registering and Paying MGD?
You have the responsibility to register for, and pay, Machine Games Duty, if you hold any of these licences:
- Bookmaking office licence or bingo club licence.
- Club premises certificate, club gaming permit, or club machine permit.
- Family entertainment centre gaming machine permit.
- Licence to sell alcohol in Northern Ireland.
- Prize gaming permit or amusement permit.
- Premises licence (e.g. for alcohol or gambling).
- Registration certificate including a club registration certificate.
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.
Registering for Machine Games Duty
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:
- Any licence or permit numbers for the premises.
- Your Unique Taxpayer Reference (UTR) (if you registered for Self Assessment or Corporation Tax).
- Your VAT number (if you registered for VAT).
- Your National Insurance number.
- To know the total number of machines that you have.
- The MGD agent reference number and postcode of your accountant (if they will file MGD returns on your behalf).
After MGD Registration
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.
Filing Paper Returns for MGD
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.
ALSO IN THIS SECTION
Gambling Duties | A list of the current gaming duty bands and gambling duty rates in Britain.
Regulations for Problem Gamblers | The UK government considers introducing a new gambling law.
Machine Games Duty Rates
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.
Filing Machine Games Duty
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).
After Filing a Return
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.
File a Return Using Paper Forms
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.
Excise Processing Teams
Changing Your Details for MGD
Once you sign in to the Machine Games Duty online service you will be able make changes, such as:
- Adding, changing, or completely removing an authorised agent to file returns on your behalf.
- Changing your details for a contact address and other stored information.
- Canceling your MGD registration altogether. This may be necessary if you stop trading, no longer have gaming machine, or you will register as part of a group of companies.
Note: You would need to tell HMRC your registration number if you choose to contact them by telephone or by postal methods.
Switching to File Online (instead of paper returns)
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.