Hi I have a client who is a public house and has had to register for machine games duty. I have read loads of articcles from HMRC about the returns for MGD but to be honest none of them seem to make sense. The client use to pay vat on their share of the profits from the games machines, so going forward with the MGD how is this dealt with within the accounts considering the client is vat registered? Do you post the profits from the games machines as T9 on sage so they are not included in the normal vat return? if this is the case how is best to record these for the mgd return???
Does anyone have any experience of this who could advise me?
The net takings from the machine (i.e. amount charged to play the game less the amount paid out in winnings) is exempt from VAT now that MGD is in force UNLESS the business is using the flat rate scheme whereby the net takings forms part of income for which the flat rate percentage is applied.
To post the net takings from the machine I would use the code T2 when posting the amount into SAGE.
With respect to accounting for MGD you will need to keep an Excise Duty Account which shows all the info to complete the MGD Return and how the figures on the Return have been calculated.
Thank you for your reply. Im still little confused as youy say the amount charged to play the game less the amount paid out in winnings, the client obviously has an invoice from the company who supplies the machines and the profit after taking out the cost to play is split between the pub landlord and the machine owner therefore the landlord does not receive the full amount after play fee is deducted, they only receive a share and there is also rental taken out. Bearing this in mind how can they then pay machine games duty at 20% on the whole amount when this is not what they have received in income?
As you probably realised Keely, the liability of MGD will rest with your client, the pub landlord. Only in a certain circumstance would the machine supplier get involved (i.e. if your client did not register for MGD).
What should happen is that machine supplier should take his share AFTER MGD is paid.
For example,
Net Taking For The Quarter: £1,875 MGD @ 20% : £ 375 Total Takings After MGD : £1,500
The £1,500 would then be split 50:50 (i.e. £750 each).
The machine supplier will charge VAT on the £750 (i.e. £150). However, your client should be able to claim back the VAT along with other purchases.
-- Edited by Truemanbrown on Tuesday 12th of March 2013 07:44:24 PM
