For British amusement operators, there are not many glimmers of hope to be found in today’s Budget, announced by George Osborne. By far the biggest disappointment, of course, is the setting of the new Machine Games Duty (MGD) at 20 percent when the industry had hoped it would not much exceed 15 percent.
Even the less significant lower rate (for small-prize machines) is, at five percent, way over the three percent that BACTA had lobbied for.
The trade body’s president Derek Petrie said today, starkly: “The end for many amusement arcades is nigh.”
The only real positives for operators are the further reductions in corporation tax, which will continue to 2014, although it might also be perversely hoped that the dramatic increase in tobacco duty will have a positive knock-on for the sector if it persuades yet more people to give up smoking – or at least cancel out the negative knock-ons of the smoking ban for amusement venues and pubs.
The increase in the personal tax allowance could also help encourage consumer spending, a very little, but none of this goes much way toward offsetting the MGD problem.
For the supply side of the industry, however, the Budget is somewhat cheerier. Not only will those corporation tax reductions help, but there will also be new tax credits for research and development.
Most interesting, perhaps, is the plan for tax breaks similar to those enjoyed by the film industry, but this time for the animation and video game businesses. If the government is serious about encouraging those sectors, perhaps it can be persuaded to give to the creators of game content what it takes away from the operators of games.
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