Arcades facing tougher taxation

SEAFRONT arcade operators could face crippling additional tax bills due to changes in the way the industry is run, a new report has warned.

Trade body Bacta said businesses faced an average additional tax bill of £400,000, which will “almost certainly” add to the 200 arcade closures in the past two years.

Nikolas Shaw, who runs Silver Dollar in Foreshore Road, said it was “another blow to the industry”.

He added: “It’s an additional cost to operators which will have a knock-on effect on everybody.

“The system has been fine for years, so it seems unnecessary to change it.

“All new legislation costs money and it’s always the operator who has to foot the bill.”

However, he explained that he didn’t believe it would affect them to anywhere near the tune of £400,000 – the average figure quoted in the report.

The report by Ernst & Young for Bacta found that the worst hit businesses could face an extra tax bill of over £1 million a year.

Derek Petrie, president of Bacta, said: “At present we have a taxation system that works and is understood by arcade owners. In front of us we have a proposal to discard that system and replace it with a new tax that will threaten the livelihoods of hundreds of operators at seaside resorts across the UK.

“The new system will introduce further complexity and a burden of compliance to an already strained industry.

“The data from Ernst & Young clearly states that the losers from these changes will face large, crippling new tax bills of £400,000 on average. This change is disruptive, unwarranted and under-researched.

“We have seen over 200 amusement arcades close in the past two years, many of them small, family-run seaside businesses.

“While the Government is busy promoting UK seaside tourism with one hand, the Treasury seems intent on taking it away with the other.”

Under the Government’s new proposals, the existing tax on slot machines (limited to VAT on the slots and amusement machine licence duty on machines with payouts over £500) will be scrapped and replaced by a tax on everything.