Games tax will impact on Cleethorpes' amusement arcades
A CONTROVERSIAL new tax regime that will impact on Cleethorpes' amusement arcades comes into force next month.
The start button will be pressed for Machine Games Duty (MGD) on February 1, with those responsible for premises where slot machines are provided having to register with HM Revenue And Customs by Friday.
It replaces the current system of an annual charge for a licence and standard-rate VAT on takings.
Applicable to all venues, from bookmakers and casinos through to pubs and clubs, MGD – set at 20 per cent – becomes a requirement on amusements where the cash prize is greater than the cost to play.
Owen Taylor, managing director of Taylor Made Fun, runs three arcades in Cleethorpes, as well as attractions in Scarborough and Bridlington.
He was critical of the new regime when it was first announced in the Budget in March last year, having been frustrated that the consultation didn't include definitive figures.
As vice-president of the British Amusement Caterers Trade Association, he has pushed for some leniency on coastal operators, where business is seasonal, but it has yet to appear.
He said: "It will effect us, but we are not sure yet, just how bad it will be. MGD is being brought in by the Government because it is not happy with the tax collected through gambling. It is misguided. It should be imposed on the major gambling, the internet gambling, those who are taking £200 million a year, and why it hasn't no-one can understand.
"It is not only detrimental to my business but to the high street operators, too. It is asking my business to cough up a bit more when soon there will be no more to give. We operate 2p machines, we are real family arcades, and we have to pay out even though they are nowhere near the league of the bookies and high streets."
Angered by the fact that none of the take can be claimed back with fixtures and fittings purchases to improve the arcade environment, Mr Taylor said: "That is significant because people like me want to re-invest.
"The licence (the previous tool) was nothing like this. We are trying very hard to quantify it, but until we get a year in and see the structure of it, we don't know what the impact will be on overall turnover. The effect will hinge on this 20 per cent. I was asking for a tourism tax for all resorts in the UK, because of the seasonality of the business. The window is so short, and I don't think we should have to pay the 20 per cent.
"There should be something to say that we are employing people out of season, and trying to keep costs down. It is purely a seasonal business.
"We are not a city, we are not a high street."
And while an additional tax on gambling in austere times may ruffle few feathers in the general public's thinking, Mr Taylor told of the positive he believes businesses like his in Cleethorpes offer.
"It is a learning curve for kids," he said. "It is good for them to go into an amusement arcade and play 2p, 5p and 10p machines, and realise they are not going to win every time, rather than going into a bookies or going online one day later in life, and suddenly losing all the money they needed to feed their kids."