Will Machine Games Duty be the end for Penny Falls?
As if times aren’t hard enough for the leisure industry!
With consumers tightening their belts another notch, we see another industry potentially about to be hit by a further tax bill. The leisure industry – and more specifically the traditional seaside amusement arcades – have already suffered an unprecedented increase in administrations over the last year. Many have closed and the likelihood of them reopening is slim. A large number of arcade and gaming machine owning companies, including pubs, have recently enjoyed VAT refunds of thousands of pounds following a successful legal challenge two years ago against HMRC on VAT overpayments. It’s still not too late for other claims to go in, but there could be a sting in the tail. Whilst HMRC is making the refunds, it is fighting the decision in the European courts. Should HMRC win they will want their money back. Everybody in the sector is being advised to, and should, make a repayment claim but owners must be mindful of what might happen in the future and seek advice on how best to deal with potential clawback claims. Reports suggest that claims totalling well in excess of £100m have already been made. To add to the problems, the government plans to introduce a new Machine Games Duty over the next couple of years which could make life much tougher for owners, even though their gaming machines will become VAT-exempt. At the moment, only machines which pay jackpots of £25 or more are taxed. The proposed new tax would apply to all machines and would impose extra charges on top of amusement arcade annual license fees, which themselves were increased by the 2005 Gaming Act. Arcade owners say the old system, which levies a charge for each gaming machine, plus VAT, whilst not ideal, works well. As ever nobody seems to have considered the bigger picture. If the amusement arcades disappear it becomes another nail in the coffin of our seaside towns and their other small businesses who rely on an already dwindling tourist industry to keep their heads above water ENDS Notes to Editors Press contacts: Annie Wilson, Senior PR Executive Kingston Smith Tel: 020 7566 3574 Mobile: 07887 685 463 Email: email@example.com About Kingston Smith & Partners LLP: Kingston Smith & Partners LLP is the Corporate Recovery and Insolvency arm of Kingston Smith LLP, the top 20 accountancy firm. The firm offers a full range of insolvency and corporate recovery services and provides specialist services to the financial community, including viability and security reviews, restructuring and new business opportunities. Kingston Smith & Partners undertakes a substantial amount of work as office-holders and advisers for government agencies, solicitors, accountants and others. The firm focuses on providing realistic, pragmatic and commercial advice, as well as having the ability to recognise and deal with the sensitivities of any particular situation. Having set up the Forensic Insolvency & Recovery Service (FIRS) in 1999, the firm is at the forefront of insolvency investigation work carried out on conditional fee agreements, using designated investigation teams working from both its London and St Albans locations.