Machine Games Duty 25% band widens to £1 stakes, £100 prizes

From 1 April 2027, a dutiable gaming machine will fall into the higher Machine Games Duty band at 25% where either the maximum charge to play one game is more than £1 or the maximum cash prize is more than £100GOV. Machines in that band are currently charged at the standard rate of 20%GOV, so the duty on their net takings will rise by five percentage points from that dateGOV.

The change moves the boundary of the higher band without rewriting how the duty is calculated. Duty remains charged on total net takings for the accounting period: what players are charged to play the dutiable games minus the value of winnings paid, including non-cash prizes. Charity events, tournaments, lottery machines and machines for domestic use remain outside the duty. Where a machine offers more than one game, the whole of its takings are taxed at the rate for the highest-rated game on the machine.

The current published rate table charges 5% where the cost to play is 20 pence or less and the prize is £10 or less, 20% where the cost is between 21 pence and £5 with a prize of £11 or more, and 25% for all other machines, principally those charging more than £5. Excise Notice 452 expresses the same structure as Type 1, Type 2 and Type 3 machines: Type 1 within the 20 pence and £10 limits, Type 2 within the £5 limit but outside Type 1, and Type 3 for everything else. From 1 April 2027, the £5 charge test and the open-ended prize test for the higher band are replaced for the affected machines by the £1-or-£100 test stated in the measureGOV.

In practice the machines that move are the higher-stake, higher-prize part of the current standard bandGOV. A machine charging up to £5 with a prize above £10 is today a standard-rate machineGOV; from 1 April 2027 it will be a higher-rate machine if its maximum charge exceeds £1, even though its maximum prize is £100 or lessGOV. Equally, a lower-stake machine whose top prize exceeds £100 will move to the higher rate even if its charge is £1 or lessGOV. Either condition alone is enough.GOV Machines at or below both thresholds stay where they are: a 20 pence or £10 machine remains at the 5% lower rate, and a machine within the current standard-band limits but charging £1 or less with a prize of £100 or less remains at 20%.

Operators should therefore review each machine by its maximum charge and maximum prize rather than by its current duty band. A machine whose stake or prize is changed after close of business part way through an accounting period is already dealt with by splitting takings before and after the change between the old and new types.

The legal basis is the Machine Games Duty regime in Schedule 24 to the Finance Act 2012, applied through the Type 1, Type 2 and Type 3 structure in Excise Notice 452.