EY Budget reaction: Machine operators face “reel” increases in taxation

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Chris Sanger, head of tax policy at EY comments:

“Today’s Budget was a more sombre affair for the gambling industry with higher than expected rates announced for the Machine Games Duty. This is intended to be “neutral” for the Exchequer but a rate of 20% is higher than that calculated by many in the industry, who had lobbied for the existing remote gaming rate of 15%. This will clearly be a disappointment and raise concerns for casinos, betting offices, bingo halls, high street arcades, seaside arcades, clubs and pubs. Given the perception of a significant tax increase, this is likely to remain a contentious issue.

“The Budget has also confirmed that the lower rate of Machine Games Duty will be 5%, although industry will be disappointed that this rate will only apply to the smaller group of “Category D machines” and will not be extended wider to “Skill with Prize” machines, which fall under the higher rate of 20%.

“Looking more widely, the Government confirmed that the remote gaming duty would be reformed onto a place of consumption basis to capture all gambling by people in the UK, even when carried out on foreign servers. This is expected to raise £ ¼ billion per annum by the end of the parliament.”