Clause 12
Finance (No. 2) Bill
9:15 am
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
To some extent, the clause is a companion of clause 11. It will amend existing excise legislation to align amusement machine licence duty categories with the categories under the Gambling Act 2005, as we announced in the pre-Budget report. In addition, it will set the new duty rates. As I said in respect of clause 11, changes will take effect from1 August 2006 to give both traders and Her Majesty’s Revenue and Customs the time that they need to adjust their systems and ensure that, from both sides, the transition to the new regime will be as smooth as possible.
When we announced in the pre-Budget report that we would align the AMLD regime with the Gambling Act, it was generally agreed that the intention was desirable as a simplification measure. It will give operators a greater consistency between the tax and the social regulatory regimes. In general, the new duty rates on gaming machines reflect a revalorisation in line with inflation, following a freeze in last year’s Budget and a freeze in the Budget 2003.
To ensure what we believe is a more fair and equitable tax treatment for machines, the clause will introduce a new £5,000 annual rate for the unlimited stake, unlimited jackpot machines to be located in the one regional casino in future. It will introduce a £2,500 annual rate for other high-value casino jackpot machines. From the end of October last year, those machines saw their stake and prize limits double from £1 and £2,000 to £2 and £4,000.
A new rate of £1,780 will be introduced for jackpot machines with a maximum prize of £250. That reflects the inclusion in that category of some jackpot machines that offer the relatively low stake of just 10p. We decided not to wait for the implementation of the Gambling Act before the change. That is essentially because changes in the machine market mean that the old system of rates and categories is increasingly outdated. On that basis, I commend the clause to the Committee.