Acts”, at the end insert—

“(f) the provisions of Part 1 of Schedule 24 to the Finance Act
2012;”.

(3) In the definition of “revenue trader”, in paragraph (a)—

(a) omit “or” at the end of sub-paragraph (ic),

(b) 5after that sub-paragraph insert—

“( id) being responsible for premises where relevant
machines are located (within the meaning of
Part 1 of Schedule 24 to the Finance Act 2012);
or”, and

(c) 10in sub-paragraph (ii), for “or (ic)” substitute “, (ic) or (id)”.

42 (1) For section 118BC of that Act (inspection powers: gaming duty) substitute—

“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) 15section 10 gaming is taking place, has taken place or is about
to take place on the premises, or

(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) 20The officer may at any reasonable time enter and inspect the
premises and inspect—

(a) accounts, records and other documents in the custody or
control of any relevant person, and

(b) any relevant equipment.

(3) 25Subsection (1) does not permit an officer to enter or inspect a
particular part of premises if—

(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) 30the part is used solely as a dwelling.

(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) 35to carry out any other operation that may be necessary to
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) 40in relation to gaming duty, a person who is engaging, or
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
45or is about to become liable to machine games duty or whom

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
5intended 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
10machine 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

(b) 15a 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)”.

43 20In 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—

“(2B) 25Subsection (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
30paragraph 7, after paragraph (c) insert—

“(ca) machine games duty,”.

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 35In 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”.

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) 40bingo duty or lottery duty is chargeable, or would be
chargeable but for an express exception, or

(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

“(viii) 5machine 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;

• 10“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;

• 15“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;

• 20“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;

• 25“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
  30period, 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),
  35however it is described or paid out and whether it is a prize
  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;

• 40“registered” has the meaning given in paragraph 12 (and “registration”
  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
  45be chargeable, or

  (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;

Finance BillPage 563

• “representative” means a personal representative, trustee in
  bankruptcy, receiver or liquidator or any other person acting in a
  representative capacity;

• “specified” includes described;

• 5“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
  period, has the meaning given in paragraph 7;

• “taxable person” has the meaning given in paragraph 11;

• 10“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.

(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) 15whether 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
playing a machine game—

(a) is a reference to the charge (or the lowest or highest charge) payable
20for 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
ostensibly a charge for something else).

(4) A reference to “paying” a charge is to be read, in the case of a charge in
25money’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
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) 30A 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.

(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
35is issued to those wanting to play dutiable machines games on it.

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

40Amendment of BGDA 1981

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.

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
5paragraph 16 of Schedule 3”.

(3) In section 31 (protection of officers), for “remote gaming duty or the duty on
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
10duty”.

Amendment of other enactments

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 15In 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
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
20(i).

Transitional provision and savings

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) 25That amount is the difference between—

(a) the amount of duty actually paid on the licence before the go-live
date in accordance with section 23 of that Act, and

(b) the amount (if less) determined in accordance with sub-paragraph
(3).

(3) 30The amount is to be determined as follows—

Step 1

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
35immediately before the go-live date. The day immediately following the end
of that period of complete months is referred to as “day X”.

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
40day before the go-live date. The duty payable for each such day in that
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
made under paragraph 7A of Schedule 4 to BGDA 1981 (payment of
duty by instalments), and

(b) 5the 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),

the difference between those amounts is to be treated under that Act as
unpaid duty.

(5) 10If 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—

(a) the person may give notice to HMRC of that fact,

(b) the Commissioners must pay interest to the person on the amount of
15the 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
(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
20delay).

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
may apply—

(a) for the licence to be treated as extended for the necessary period, or

(b) 25for 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
immediately before the go-live date.

(3) An application under this paragraph may be made before or after the licence
30is 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
may require.

(5) HMRC must grant the application once it has received payment of an
35amount 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
being 1/365th of the duty payable for a licence of 12 months for a machine
40of 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
payable in accordance with this paragraph as to an amount of duty payable
45in 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
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
5an application had been made for a licence under this paragraph.

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
10one or more whole months were omitted, and

(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
15machine licences for a period of 12 months has effect in relation to a final
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
20the manner described in paragraph 60(6).

(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) 25The enactments repealed by this Part of this Schedule continue to have effect
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) 30Without prejudice to the generality of sub-paragraph (2), paragraph 4 of
Schedule 4A to BGDA 1981 (assessment of amount equivalent to duty) is to
be read as if the reference in sub-paragraph (3) to the due date were a
reference to the day before the go-live date.

Part 3 35VAT exemption

Amendment of VATA 1994

63 For section 23 of VATA 1994 substitute—

“23 Value of supplies involving relevant machine games

(1) If a person plays a relevant machine game, then for the purposes of
40VAT the amount paid by the person is to be treated as consideration
for a supply of services to that person.

(2) “Relevant machine game” is defined in section 23A.

(3) The value to be taken as the value of supplies made by a person (“the
supplier”) in the circumstances mentioned in subsection (1) in any
period is to be determined as if the consideration for the supplies
5were reduced by an amount equal to X.

(4) X is the amount (if any) paid out in that period by way of winnings
in respect of relevant machine games made available by the supplier
(whether the games were played in the same period or an earlier
one).

(5) 10X does not include any winnings paid out to the supplier or a person
acting on the supplier’s behalf.

(6) Inserting a token into a machine on which a relevant machine game
is played is to be treated for the purposes of subsection (1) as the
payment of an amount equal to that for which the token can be
15obtained.

(7) Providing a specified kind of token by way of winnings is to be
treated for the purposes of subsection (4) as the payment out of an
amount by way of winnings equal to the value of the token.

(8) A specified kind of token is—

(a) 20a token that can be inserted into the same machine to enable
games to be played on the machine, or

(b) a token that is not of such a kind but can be exchanged for
money.

(9) The value of a specified kind of token is—

(a) 25for a token within subsection (8)(a), an amount equal to that
for which the token can be obtained, and

(b) for a token within subsection (8)(b), an amount equal to that
for which the token can be exchanged.

(10) If it is not reasonably practicable to attribute payments and winnings
30to relevant machine games or to apportion them between relevant
machine games and other games or other activities, any attribution
or apportionment is to be done on a just and reasonable basis.

(11) For the purposes of this section, a person plays a game if the person
participates in the game—

(a) 35whether 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.

23A Meaning of “relevant machine game”

(1) A “relevant machine game” is a game (whether of skill or chance or
40both) that—

(a) is played on a machine for a prize, and

(b) is not excluded by subsection (2).

(2) A game is excluded by this subsection if—

(a) takings and payouts in respect of it are taken into account in
45determining any charge to machine games duty,

(b) it involves betting on future real events,

(c) bingo duty is charged on the playing of it or would be so
charged but for paragraphs 1 to 5 of Schedule 3 to the Betting
and Gaming Duties Act 1981 (exemptions from bingo duty),

(d) 5lottery duty is charged on the taking of a ticket or chance in it
or would be so charged but for an express exception,

(e) it is a real game of chance and playing it amounts to dutiable
gaming for the purposes of section 10 of the Finance Act 1997
or would do so but for subsection (3), (3B) or (4) of that
10section, or

(f) playing it amounts to remote gaming within the meaning of
section 26A of the Betting and Gaming Duties Act 1981
(remote gaming duty: interpretation).

(3) In this section—

• 15“game” does not include a sport;

• “machine” means any apparatus that uses or applies
  mechanical power, electrical power or both;

• “prize”, in relation to a game, does not include the opportunity
  to play the game again;

• 20“real game of chance” means a game of chance (within the
  meaning of the Betting and Gaming Duties Act 1981) that is
  non-virtual.

(4) The Treasury may by order amend this section.”

64 (1) In Part 2 of Schedule 9 to that Act (exemptions: the groups), the provisions
25of Group 4 are amended as follows.

(2) After Item 1 insert—

“1A The provision of any facilities for the playing of dutiable machine
games (as defined in Part 1 of Schedule 24 to the Finance Act 2012)
but only to the extent that—

(a) 30the facilities are used to play such games, and

(b) the takings and payouts in respect of those games are taken
into account in determining the charge to machine games
duty.”

(3) In Note (1)—

(a) 35for “Item 1 does” substitute “Items 1 and 1A do”, and

(b) omit paragraph (d) and the word “or” immediately preceding that
paragraph.

(4) After Note (1) insert—

“(1A) Item 1 does not apply to the provision of facilities to the extent that
40the facilities are used to play a relevant machine game (as defined
in section 23A).”

(5) Accordingly—

(a) in Part 2 of Schedule 9, in the heading of Group 4, after “GAMING”
insert “, DUTIABLE MACHINE GAMES”, and

(b) 45in Part 1 of that Schedule, in the Index, for “Betting, gaming and
lotteries” substitute “Betting, gaming, dutiable machine games and
lotteries”.

65 (1) Paragraph 9 of Schedule 11 to that Act (administration, collection and
enforcement) is amended as follows.

(2) For paragraph (a) substitute—

“( a) to open any machine on which relevant
5machine games (as defined in section 23A) are
capable of being played; and”.

(3) In paragraph (b), for “subsection (2) of that section” substitute “section
23(3)”.

(4) Accordingly, in the heading immediately before paragraph 9, for “gaming
10machines” substitute “machines on which relevant machine games are played”.

Part 4 Miscellaneous

Application

66 (1) The provisions of this Schedule have effect as follows.

(2) 15Part 1 has effect in relation to the playing of machine games on or after 1
February 2013 (and Schedules 55 and 56 to FA 2009, as amended by Part 1 of
this Schedule, are taken to have come into force for the purposes of machine
games duty on that date).

(3) Part 2 has effect in relation to the provision of amusement machines on or
20after 1 February 2013.

(4) Part 3 has effect in relation to supplies made on or after that date.

(5) A reference in this Schedule to the “go-live date” is to 1 February 2013.

67 (1) The Treasury may by regulations make transitional or saving provision in
connection with the removal of amusement machine licence duty and the
25introduction of machine games duty.

(2) The power in sub-paragraph (1) is without prejudice to—

(a) the provision made by Part 2 of this Schedule, and

(b) any power in this Schedule apart from this paragraph to make
transitional or saving provision in connection with the matters
30mentioned in sub-paragraph (1).

(3) Regulations under this paragraph are to be made by statutory instrument.

(4) A statutory instrument containing regulations under this paragraph is
subject to annulment in pursuance of a resolution of the House of Commons.

Section 193

SCHEDULE 25 35Remote gambling: double taxation relief

Unilateral relief

1 BGDA 1981 is amended as follows.