Consultation outcome

Taxation of gaming machines: gross profits tax

This consultation was published under the 2005 to 2010 Labour government

This consultation has concluded

Download the full outcome

Detail of outcome

Government response to the consultation on a gross profits tax on gaming machines

Original consultation

This consultation ran from to


Seeking views on taxation of gaming machines 


Consultation description

Consultation and responses

A consultation on the taxation of gaming machines was launched by the previous Government, and closed on 23 October 2009. The consultation received 42 written responses from gambling firms, industry representative groups and other bodies.

The Government is very grateful for respondents’ contributions to the consultation process and has published a summary of responses. This includes the Government’s response to stakeholders’ comments, proposed next steps and an outline of MGD.  Officials will continue to engage with stakeholders on the design of the new duty.

Updates and announcements

24 May 2011: The Government has today published a consultation on design characteristics of MGD, together with draft legislation. All interested parties are encouraged to engage fully with this consultation: ‘Machine Games Duty Implementation’ (closes 26 July 2011).

11 January 2011: In order to work effectively with industry on the details of a Gross Profits Tax, the Government has revised the consultation timeline.

The Government now intends to consult on draft legislation with relevant parties in Spring/early Summer, with the intention of legislating in Finance Bill 2012. This replaces the consultation on draft legislation previously scheduled for January 2011.

9 December 2010: The Government confirmed its intention to proceed with reforms to the taxation of gaming machines.

The Government intends to introduce legislation in the Finance Bill 2011 for a gross profits tax under the name “Machine Games Duty” (MGD).  MGD will replace both Amusement Machine License Duty (AMLD) where this is chargeable and VAT on net takings. MGD will be a tax on the income from the playing of prize games on machines.

A GPT will improve the future predictability and sustainability of the tax regime by making it more resilient to technological progress, regulatory changes and to inflation. The Government believes that exempting gaming machines from VAT will also increase the stability of the tax regime as gaming machines will then have the same VAT treatment as other gambling activities. A GPT also supports the Government’s objective of a fairer tax system by ensuring the taxation of gaming machines is more closely linked to machine profits.

It is planned that the draft legislation will be published for a short consultation period in January 2011. There will be a period of at least one year from the date on which the Finance Bill 2011 receives Royal Assent before the new tax is implemented.