Higher tax on game machines bad for pubs

THOUSANDS of jobs will be put at risk from the increased rate of machine games duty outlined in the Budget, according to the Association of British Bookmakers (ABB).

Effective from February 2013, a tax rate of 20 per cent will apply to most gambling machines while a duty of five per cent will be payable on lower stake games such as the 10p slot machine.

“We are very disappointed that the government has introduced an unsustainable rate” of tax, said ABB chief executive Dirk Vennix.

He said bookmakers already pay over £1bn in tax – roughly £400m more than they make in profit – and the increased tax puts 2,600 betting shops and 11,000 jobs at risk.

Pubs are also expected to take a hit. PwC tax director Gareth Martyn said: “For the leisure industry, this [new rate of tax] will almost certainly be the most significant announcement coming out of the Budget.”

Industry consensus suggests a revenue neutral machine games duty would be between 15 and 17 per cent, meaning pub chains and leisure business could take a significant hit.

Brigid Simmonds, chief executive of the British Beer and Pub Association, called the move “a bitter blow” and forecast it will cost the pub sector £14m in extra taxes next year.

She said, “Fruit machines and quiz machines are an important part of the fabric of British pubs, but this punitive tax could see many of them disappear.”