A new day, a new tax on our pubs

From Brew Wales

Just when we think that Colostomy Brown and his Darling Chancellor cannot tax the pub industry any further, news comes through of this via the British Beer and Pub Association:

Government plans to change the taxation of popular quiz and games machines like Cluedo, Who Wants To Be A Millionaire and Monopoly, will cost the industry £85 million, put many manufacturers out of business and turn more people towards gambling on fruit machines, the pub sector warned today.

Her Majesty’s Revenue and Customs (HMRC) are seeking to reclassify Skills with Prizes (SWP) machines as gambling machines, making them liable for gaming machine tax. HMRC also wants to make the tax retrospective for the last three years, which could cost the industry £85 million.

Retrospective! Our pubs are still closing at a rate of about 40 a week and the Government is doing bugger all to stop this - a retrospective tax will do nothing for an industry already in decline.

SWP machines have become increasingly popular in pubs in recent years. They are often based on well known game shows, such as Who Wants To Be A Millionaire, Question of Sport, The Weakest Link, or board games such as Cluedo, Monopoly or Trivial Pursuit. They rely on the knowledge and ability of players to answer quiz questions and have become an important part of the entertainment offered to many customers, in a nation where the pub quiz is a national institution. There are currently estimated to be around 35,000 SWP machines being used in the UK.

The industry argues that SWP machines, which have been on the market for many years, have always been recognised as distinct and different from gambling machines such as fruit machines. In fact, it was a distinction explicitly recognised in the tax system. HMRC used to levy a separate SWP tax until its removal in August 2006. Gambling machines, where chance is the deciding factor on whether a player wins a cash payout, have always been covered by a tax called Amusement Machine Licence Duty (AMLD). Given SWP machines have existed for many years without being classified as gambling machines, the industry is questioning the legal and rational basis for such a change now.

The industry has highlighted five principle threats arising from HMRC’s attempt to reclassify quiz machines as gambling machines in order to make them liable for tax:

• It will cost the industry £85 million, or £2,500 per pub

• It will result in fewer people playing SWP machines for entertainment and more people playing fruit machines to gamble

• SWP machines are manufactured in Britain and the scale of the tax bill will put many out of business

• It will place hard-pressed pubs – closing at the rate of 39 a week – under further pressure

• Jobs will be lost in manufacturing and pubs

The industry estimates the tax revenues that will be lost to the Treasury due to falling business revenues, failing businesses and rising job losses will far outweigh any revenue gain from the tax change.

Brigid Simmonds, Chief Executive of the British Beer & Pub Association said, “The perverse result of this tax change will be to switch more people onto gambling as quiz machines are switched off across Britain. That cannot be a sensible or sustainable public policy outcome for Government.

“It must make more sense for Government to encourage those people who enjoy playing machines to have a bit of fun with their friends with games that are about skill and entertainment, rather than turn to gambling. At the moment there is an incentive for pubs and people to play these machines. This proposed tax change will remove that at a stroke.

“This sudden tax change will place a swingeing tax burden on the industry. The inevitable result of such a considerable cost increase will be business failure, job losses and contraction in this growing market.”

Another day another tax, this Government has ruined this country, roll on General Election Day and a chance to vote these idiots out of office.