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HMRC internal manual

Compliance Handbook

Penalties for Failure to Pay on Time: Rules for specific taxes: Machine Games Duty (MGD): Overview

The penalty rules for failure to pay Machine Games Duty (MGD) in full and on time start for payments due on or after 1 February 2013.

To decide whether a person is liable to a penalty you need to know the due date and the penalty date.

The due date for an amount of MGD is 30 days after the end of the accounting period. If the 30t h day after the end of the accounting period is not a business day, then the due date becomes the last business day before that day.

The penalty date is the day after the due date.

A person can be liable to

  • A default penalty if an amount of MGD is unpaid at the penalty date, and
  • two further penalties if an amount of MGD remains unpaid 6 and 12 months after the penalty date.

Penalties are charged in relation to a due date for an accounting period. The first failure to pay MGD by the due date counts as a failure and starts the penalty period, but does not attract a default penalty. A penalty period starts on the penalty date and ends 12 months after the due date of the accounting period in which the first default was incurred. A penalty period is extended if there are further failures to pay MGD by the due date. The penalty period ends 12 months after the due date for the person’s most recent failure.

The penalty regime is progressive, which means that continuing failures within a penalty period can give rise to an increased rate of default penalty.

SI 2012/2500