Finance (No. 4) Bill

Session 2010 - 12
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Finance (No. 4) Bill

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 1 — Imposition of duty
555

the period before the go-live date with the modifications specified in the
notice.
      (2)
A notice under sub-paragraph (1) must be published by the Commissioners.
      (3)
For a person who, on the go-live date, is responsible for premises where a
relevant machine is located, the first accounting period is to be the period
5
beginning with that day and ending with—
(a)
the day before the day on which the next accounting period is to
begin by virtue of a direction given under paragraph 14(2), or
(b)
such other day as is necessary to give effect to an agreement made
under paragraph 14(4).
10
Consequential amendments
41    (1)
Section 1(1) of CEMA 1979 (interpretation) is amended as follows.
      (2)
In the definition of “the revenue trade provisions of the customs and excise
Acts”, at the end insert—
“(f)
the provisions of Part 1 of Schedule 24 to the Finance Act
15
2012;”.
      (3)
In the definition of “revenue trader”, in paragraph (a)—
(a)
omit “or” at the end of sub-paragraph (ic),
(b)
after that sub-paragraph insert—
“(id)
being responsible for premises where relevant
20
machines are located (within the meaning of
Part 1 of Schedule 24 to the Finance Act 2012);
or”, and
(c)
in sub-paragraph (ii), for “or (ic)” substitute “, (ic) or (id)”.
42    (1)
For section 118BC of that Act (inspection powers: gaming duty) substitute—
25
“118BC
Inspection powers: gaming duty and machine games duty
(1)
Subsection (2) applies to premises if an officer has reasonable cause
to believe that—
(a)
section 10 gaming is taking place, has taken place or is about
to take place on the premises, or
30
(b)
machines are located on the premises in respect of which a
person is, has been or is about to become liable for machine
games duty.
(2)
The officer may at any reasonable time enter and inspect the
premises and inspect—
35
(a)
accounts, records and other documents in the custody or
control of any relevant person, and
(b)
any relevant equipment.
(3)
Subsection (1) does not permit an officer to enter or inspect a
particular part of premises if—
40
(a)
the officer has no reasonable cause to believe that paragraph
(a) or, as the case may be, (b) of that subsection is satisfied
with respect to that particular part, and
(b)
the part is used solely as a dwelling.

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 1 — Imposition of duty
556

(4)
An officer may at any reasonable time (whether or not as part of an
inspection under subsection (2)) require a relevant person or anyone
acting on such a person’s behalf—
(a)
to open relevant equipment, and
(b)
to carry out any other operation that may be necessary to
5
enable the officer to ascertain whether any gaming duty or
machine games duty is payable in respect of it and, if so, how
much.
(5)
A “relevant person” is—
(a)
in relation to gaming duty, a person who is engaging, or
10
whom the officer reasonably suspects of engaging, in section
10 gaming or in any activity by reason of which the person is
or may become liable to gaming duty, and
(b)
in relation to machine games duty, a person who is, has been
or is about to become liable to machine games duty or whom
15
the officer reasonably suspects of being, having been or being
about to become so liable.
(6)
“Relevant equipment” is—
(a)
in relation to gaming duty, equipment that is being, or the
officer reasonably suspects of having been or of being
20
intended to be, used on the premises for or in connection with
section 10 gaming, and
(b)
in relation to machine games duty, any equipment that is, or
the officer reasonably suspects of being, a machine in respect
of which a person is, has been or may become liable to
25
machine games duty and any other equipment used in
connection with such a machine.
(7)
In this section—
(a)
“section 10 gaming” means gaming to which section 10 of the
Finance Act 1997 applies, and
30
(b)
a reference to premises where a machine is located is to be
read in accordance with Part 1 of Schedule 24 to the Finance
Act 2012.”
      (2)
In section 118G of that Act (offences under Part 9A), in subsection (1), for “or
section 118B” substitute “, 118B or 118BC(4)”.
35
43
In section 2 of BGDA 1981 (bookmakers: general bets), in subsection (2), omit
paragraph (d).
44    (1)
Section 26H of BGDA 1981 (exemptions from remote gaming duty) is
amended as follows.
      (2)
After subsection (2A) insert—
40
“(2B)
Subsection (2) does not apply in cases where the other gambling tax
is machine games duty.”
      (3)
In subsection (3), before paragraph (b) insert—
“(aa)
machine games duty,”.
45
In Schedule A1 to BGDA 1981 (betting duties: double taxation relief), in
45
paragraph 7, after paragraph (c) insert—
“(ca)
machine games duty,”.

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 1 — Imposition of duty
557

46
In Schedule 4B to BGDA 1981 (remote gaming duty: double taxation relief),
in paragraph 7, after paragraph (c) insert—
“(ca)
machine games duty,”.
47
In section 12 of FA 1994 (assessment to excise duty), in subsection (2)(c), after
“1997” insert “or Part 1 of Schedule 24 to the Finance Act 2012”.
5
48
In section 10 of FA 1997 (gaming duty), for subsection (3AA) substitute—
“(3AA)
This section does not apply to the playing of a game in respect of
which—
(a)
bingo duty or lottery duty is chargeable, or would be
chargeable but for an express exception, or
10
(b)
machine games duty is chargeable.”
49
In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs
revenue functions of the director), in subsection (2)(e)—
(a)
omit “and” at the end of sub-paragraph (vi), and
(b)
at the end of sub-paragraph (vii) insert “and
15
(viii)
machine games duty;”.
Interpretation
50
In this Part of this Schedule—
“appeal tribunal” means the First-tier Tribunal or, where determined
by or under Tribunal Procedure Rules, the Upper Tribunal;
20
“cash” has the meaning given in paragraph 2 (and “non-cash” is to be
read accordingly);
“charge”, in relation to a game, means a charge or deduction in money
or money’s worth, however it is described or levied and whether it
becomes due before or after the game is played;
25
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs;
“dutiable machine game” has the meaning given in paragraph 2,
subject to paragraphs 3 and 4;
“game” does not include a sport;
30
“the go-live date” is defined in paragraph 66(5);
“HMRC” means Her Majesty’s Revenue and Customs;
“machine” means any apparatus that uses or applies mechanical
power, electrical power or both;
“machine game” has the meaning given in paragraph 2;
35
“MGD register” has the meaning given in paragraph 20;
“money” means money in sterling or any other currency;
“payouts” means prizes paid out to players as a result of playing
dutiable machine games on a machine;
“the payouts”, in relation to a particular taxable person and accounting
40
period, has the meaning given in paragraph 7;
“premises” includes any place, any means of transport and any stall or
other moveable structure;
“prize”, in relation to a game—
(a)
means a prize in the form of cash or non-cash (or both),
45
however it is described or paid out and whether it is a prize

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 1 — Imposition of duty
558

provided by a person making the game available or is
winnings of money staked, but
(b)
a benefit consisting of nothing more than the opportunity to
play the game again does not count as a prize;
“registered” has the meaning given in paragraph 12 (and “registration”
5
is to be read accordingly);
“registrable person” has the meaning given in paragraph 21;
“relevant machine” means—
(a)
a machine in respect of which machine games duty is or will
be chargeable, or
10
(b)
in relation to a particular taxable person and accounting
period, a machine in respect of which that person is liable for
machine games duty in that period;
“representative” means a personal representative, trustee in
bankruptcy, receiver or liquidator or any other person acting in a
15
representative capacity;
“specified” includes described;
“takings” means charges due from players for playing dutiable
machine games on a machine;
“the takings”, in relation to a particular taxable person and accounting
20
period, has the meaning given in paragraph 7;
“taxable person” has the meaning given in paragraph 11;
“total net takings” has the meaning given in paragraph 6;
“United Kingdom” includes the territorial sea of the United Kingdom.
51    (1)
This Part of this Schedule is to be read in accordance with this paragraph.
25
      (2)
A person “plays” a game if the person participates in the game—
(a)
whether or not there are other participants in the game, and
(b)
whether or not a computer generates images or data taken to
represent the actions of other participants in the game.
      (3)
A reference to the charge (or the lowest or highest charge) payable for
30
playing a machine game—
(a)
is a reference to the charge (or the lowest or highest charge) payable
for a single go at playing the game, and
(b)
includes any charge that entitles the person paying it to play a
machine game or to play it at a reduced rate (even if the charge is
35
ostensibly a charge for something else).
      (4)
A reference to “paying” a charge is to be read, in the case of a charge in
money’s worth, as a reference to the provision of the thing, or performance
of the service, in money’s worth.
      (5)
A reference to a prize (or the maximum amount of cash) that can be won
40
from playing a machine game is a reference to a prize (or the maximum
amount of cash) that can be won from a single go at playing the game.
      (6)
A reference to “paying out” a prize is to be read, in the case of a prize in
money’s worth, as a reference to the provision of the thing, or performance
of the service, in money’s worth.
45
      (7)
A reference to the premises where a machine is located or made available
includes, in the case of a portable machine, the premises where the machine
is issued to those wanting to play dutiable machines games on it.

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 2 — Removal of amusement machine licence duty
559

52
The imposition or payment of machine games duty does not make lawful
anything that is otherwise unlawful.
Part 2
Removal of amusement machine licence duty
Amendment of BGDA 1981
5
53
The following provisions of BGDA 1981 are omitted—
(a)
sections 21 to 26,
(b)
section 26H(3)(a),
(c)
section 26N(3) and (4), and
(d)
Schedules 4 and 4A.
10
54    (1)
Part 3 of that Act (general) is amended as follows.
      (2)
In section 27 (offences by bodies corporate), for the words from “section 24”
to “Schedule 4” substitute “paragraph 13(1) or (3) or 14(1) of Schedule 1 or
paragraph 16 of Schedule 3”.
      (3)
In section 31 (protection of officers), for “remote gaming duty or the duty on
15
amusement machine licences” substitute “or remote gaming duty”.
      (4)
In section 33 (interpretation), in subsection (2), for “remote gaming duty or
the duty on amusement machine licences” substitute “or remote gaming
duty”.
Amendment of other enactments
20
55
In section 102 of CEMA 1979, in subsection (3)(a), omit “or an amusement
machine licence”.
56
In section 10 of FA 1997 (gaming duty), omit subsection (3A).
57
In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and
excise wrongdoing), in the Table in paragraph 1, omit the entry relating to
25
amusement machine licence duty.
58
In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs
revenue functions of the director), in subsection (2)(e), omit sub-paragraph
(i).
Transitional provision and savings
30
59    (1)
If a licence granted under section 21 of BGDA 1981 is to expire on or after the
go-live date, the holder of the licence is entitled to repayment of an amount
of duty.
      (2)
That amount is the difference between—
(a)
the amount of duty actually paid on the licence before the go-live
35
date in accordance with section 23 of that Act, and
(b)
the amount (if less) determined in accordance with sub-paragraph
(3).
      (3)
The amount is to be determined as follows—

Step 1
40

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 2 — Removal of amusement machine licence duty
560


Calculate the amount of duty that would have been paid if the period for
which the licence was granted had been the number of complete months
beginning with the date on which the licence was granted and ending
immediately before the go-live date. The day immediately following the end
of that period of complete months is referred to as “day X”.
5


Step 2

Add to the amount calculated under Step 1 an amount representing the duty
payable for the period of days beginning with day X and ending with the
day before the go-live date. The duty payable for each such day in that
10
period is to be calculated as 1/365th of the amount of duty payable for a
licence of 12 months for a machine of the relevant category.

      (4)
If—
(a)
duty is being paid on the licence in accordance with arrangements
15
made under paragraph 7A of Schedule 4 to BGDA 1981 (payment of
duty by instalments), and
(b)
the amount of duty actually paid on the licence before the go-live
date in accordance with section 23 of that Act is less than the amount
determined in accordance with sub-paragraph (3),
20

the difference between those amounts is to be treated under that Act as
unpaid duty.
      (5)
If a person entitled to a repayment of more than £10 under this paragraph
has not received the repayment within the period of 90 days beginning with
the go-live date—
25
(a)
the person may give notice to HMRC of that fact,
(b)
the Commissioners must pay interest to the person on the amount of
the repayment for the period from the end of that 90-day period until
the day on which the repayment is made, and
(c)
any such interest accrues at the rate under section 197 of FA 1996
30
(rates of interest) that is applicable for Parts 2 and 3 of Schedule 3 to
FA 2001 (excise duty payment by Commissioners in case of error or
delay).
60    (1)
If a licence granted or to be granted under section 21 of BGDA 1981 would
expire within the period of 30 days ending with the go-live date, a person
35
may apply—
(a)
for the licence to be treated as extended for the necessary period, or
(b)
for a new amusement machine licence to be treated as granted in its
place under Schedule 4 to that Act for the necessary period.
      (2)
The necessary period is the period from expiry of the licence until
40
immediately before the go-live date.
      (3)
An application under this paragraph may be made before or after the licence
is granted but, if made after the licence is granted, it must be made before the
day on which the licence is to expire.
      (4)
The application must be made to HMRC in such form and manner as HMRC
45
may require.

Finance (No. 4) Bill
Schedule 24 — Machine games duty
Part 2 — Removal of amusement machine licence duty
561

      (5)
HMRC must grant the application once it has received payment of an
amount of duty payable on the licence (or new licence) in respect of the
necessary period.
      (6)
The amount of duty payable in respect of the necessary period is to be the
sum of the amounts payable for each day in that period, each such amount
5
being 1/365th of the duty payable for a licence of 12 months for a machine
of the relevant category.
      (7)
Schedule 4 to BGDA 1981 and any regulations made under that Schedule
apply (subject to any modifications specified by the Commissioners in a
notice published for the purposes of this paragraph) to an amount of duty
10
payable in accordance with this paragraph as to an amount of duty payable
in accordance with section 23 of that Act.
      (8)
Nothing in this paragraph affects the operation of that Act with respect to
the provision of amusement machines in the necessary period in a case
where no application is made under this paragraph or an application is not
15
granted.
      (9)
But if a default licence is granted under Schedule 4A to BGDA 1981 for the
necessary period, the amount of duty that may be assessed under paragraph
4 of that Schedule is limited to the amount that would have been payable if
an application had been made for a licence under this paragraph.
20
61    (1)
This paragraph applies to licences to be granted under section 21 of BGDA
1981 on or after 2 January 2013 (a “final month licence”).
      (2)
Section 21(3) of that Act has effect as if—
(a)
the requirement to grant amusement machine licences for a period of
one or more whole months were omitted, and
25
(b)
the power to grant amusement machine licences for a period not
exceeding 12 months were a power to grant such licences for a period
ending with a day that is no later than the day before the go-live date.
      (3)
The requirement in section 21(4) of that Act to grant special amusement
machine licences for a period of 12 months has effect in relation to a final
30
month licence as if it were a requirement to grant a licence for the period
beginning with the date of grant and ending with the day before the go-live
date.
      (4)
The amount of duty payable on a final month licence is to be calculated in
the manner described in paragraph 60(6).
35
      (5)
The Commissioners may by notice direct that Schedules 4 and 4A to BGDA
1981 and any regulations made under those Schedules are to apply to a final
month licence with such modifications as may be specified in the notice.
      (6)
A notice under sub-paragraph (5) must be published by the Commissioners.
62    (1)
The enactments repealed by this Part of this Schedule continue to have effect
40
on and after the go-live date in relation to the provision of amusement
machines before that date.
      (2)
Enactments continuing to have effect by virtue of sub-paragraph (1) are to
be read with any necessary modifications.
      (3)
Without prejudice to the generality of sub-paragraph (2), paragraph 4 of
45
Schedule 4A to BGDA 1981 (assessment of amount equivalent to duty) is to