On the 1st February of next year income from certain gaming machines will become subject to new form of duty known as Machine Games Duty (“MGD”), which replaces Amusement Machine Licence Duty and VAT.

Machines that will be affected are those where at least one of the available prizes is or includes cash more than the cost to play. MGD is payable at (normally) 20% on the take from such machines and the takings will become exempt from VAT.

The consequences of this are:

• Businesses which currently make these machines available to play (normally the person who holds a relevant licence or permit )and who will continue to make them available to play as at the 1 February 2013 are required to register with H M Revenue & Customs by the 31 December 2012; and

• As the taking will become exempt of VAT, such businesses must identify all input VAT on costs connected with these machines to determine if such VAT is recoverable under the “Partial Exemption” rules.

Registration is now possible on-line via the H M Revenue & Customs website at www. and the Government Gateway or it is possible to apply by post by obtaining a form MGD1 from the HMRC website and sending it to:


National Registration Unit
HM Revenue and Customs
Portcullis House
21 India Street
G2 4PZ

Please note that MGD is mandatory for those who make qualifying machines available to play and there will be penalties for late registrations and any failure to register.

At Burgis & Bullock our VAT team would be happy to assist you with any enquiries you have concerning the application of MGD or with your registration. We would also be happy to act as your agent in dealing with your registration on your behalf.

For more information please contact your local office, or call 0845 177 5500 or contact us online

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