Bacta is the voice of the amusement machine industry and its supply chain. The sector is a key driver of economic activity in our communities, our high streets and towns, employing approaching 40,000 people and contributing £2bn to the national economy.
The amusement machine industry has been particularly badly hit by the dual shocks of the pandemic and the ongoing cost of living crisis and the cost of doing business. This has been driven by high levels of inflation and soaring energy bills. This has been acutely felt by our members who are particularly energy intensive by their very nature, and unable to pass on costs to customers to offset these additional expenses.
In addition, those costs associated with the provision of games of chance are unable to reclaim VAT, adding 20% to already sky-high costs. That our members are forced to pay these extra costs, alongside the increase in energy bills, with no room for recompense, is fundamentally wrong and must be addressed if the sector is to thrive.
Despite these challenges, the sector remains a key vehicle for unlocking growth and driving the economic recovery, particularly at the coast and in our hard-pressed High Streets. We help to keep pubs and clubs afloat. Our policy proposals are cost-effective solutions, which set out how some small adjustments to existing regulations could unlock considerable capital which could be reinvested back into the business.
For example, enabling businesses that pay Machine Games Duty (MGD) to reclaim VAT would unlock an additional £150 – £200 million which could be reinvested in their business. Moreover, a simple tweak to the existing MGD thresholds, increasing the base rate to include machines costing 25p to play would unlock £5 to £10 million which again could be reinvested back into the wider economy and stimulate a small part of the manufacturing sector.
Finally, the Super Deduction has been a considerable success in achieving its goal of unlocking additional business investment at a time in which it was most needed. With this investment still key to unlocking long term growth, we would like to see the scheme extended, or replaced with a similar scheme, and with the eligibility criteria extended to include leased assets such as pool tables, juke boxes, and fruit machines hired to pubs and clubs.