OWNERS of amusement arcades and gaming machines across East Anglia are being warned of a potential “sting in the tail” on new tax rules for amusement arcades and gaming machines.

Many arcade and gaming machine owning companies including pubs and tourist businesses across the region have recently received VAT refunds of thousands of pounds following a successful legal challenge two years ago against HM Revenue & Customs (HMRC) on over-payments.

But Richard Wild, director of VAT in East Anglia for accountants and businesses advisers PKF, warns that for those who have hit the jackpot that there could be a sting in the tail.

“It’s true that some clients have had six figure refunds recently and it is not too late for other claims to go in – even if it seems too good to be true,” he said.

“But even though HMRC is making the refunds, it is still fighting its corner with litigation in the European courts. If it should win, it would want the money back.”

And he said that whatever, the outcome, the Government planned to introduce a new Machine Games Duty (MGD) over the next couple of years which could make life much tougher for owners, even though their gaming machines will become VAT-exempt.

The new tax is expected to be based on net takings from machines (stakes less prizes) although there is no indication as to the rates of tax.

The proposals have sparked anger from pubs, which are already under pressure from high rates of alcohol duty and feel the new tax threatens their income from games machines, and from coastal amusement arcades, which fear they could be put out of business.

“The moral is to try to get your money while you can,” Mr Wild added.

“Everybody in the sector should make a claim but be mindful of what might happen in the future and seek advice on how best to deal with it.”