1. This clause and Schedule make provision for the introduction of new rates of Amusement Machine Licence Duty, amendment of the duration for seasonal licences, and the introduction of provisions which allow for the recovery of amusement machine licence duty in relation to unlawfully unlicensed machines. The consequential repeals are listed in Schedule 2.

2. Clause 17 brings into effect Schedule 2.

3. Paragraph 1 introduces amendments to the Betting and Gaming Duties Act 1981.

4. Paragraph 2 amends section 21(3A) of the Betting and Gaming Duties Act 1981 to change the definition of a small prize machine that is excepted from licensing requirements from a ‘five-penny machine’ to a ‘ten-penny machine’. This has been done to extend the scope of the licensing exemption.

5. Paragraph 3(1) amends section 22(2) of the Betting and Gaming Duties Act 1981 to redefine a small-prize machine as one whose prize cannot exceed £8 and introduces the definition of a ‘medium-prize’ machine as a gaming machine whose maximum prize can exceed £8 but cannot exceed £15.

6. Paragraph 3(2) amends section 22(3) of the Betting and Gaming Duties Act 1981 to give the Commissioners the power to amend the prize-levels that define small and medium-prize machines described in section 22(2). This has been done to take account of the fact that there are now two types of prize machine defined in section 22(2) where there was previously only one.

7. Paragraph 4 amends section 23(2) of the Betting and Gaming Duties Act 1981 by replacing the table of licence duty rates in that section, and all references to that table, with a new table of licence duty rates. This has been done to accomodate the new duty rates and categories of licensable machines.

8. Additionally, this paragraph introduces a new section, 23(3), which defines those categories of licensable machines referred to in the new table of licence duty rates at section 23(2) of the Betting and Gaming Duties Act 1981.

9. Paragraph 5 amends section 25(1B) of the Betting and Gaming Duties Act 1981. This amends the definition of video machine by deleting the exclusion from the definition made in respect of machines which only comprise a blank surface onto which light is projected. Additionally paragraph 5 amends section 25(7) of the Act by inserting two new sub-paragraphs that accommodate the newly introduced medium-prize and ten-penny machines.

10. Paragraph 6 amends section 26(2) of the Betting and Gaming Duties Act 1981 to introduce the definition fora ten-penny machine.

11. Paragraph 7 provides for the new rates of duty and machine definitions to be effective for all licence applications received by Customs and Excise after 4 August 2000 and further provides that the amended dfinition for video machines shall take effect from Royal Assent.

12. Paragraph 8 introduces amendments to paragraph 4 of Schedule 4 to the Betting and Gaming Duties Act 1981 which relates to the duration of seasonal licences. Seasonal licences are issued to cover a six month period beginning on 1 April but are also deemed to cover the use of machines during the months of March and October. These licences are designed for use principally by operators of seaside arcades who do not trade all through the year. If premises are licensed during the winter period they are not entitled to a seasonal licence the following year.

13. The end date for seasonal licences is now deemed to be the Sunday before the first Monday in November instead of the last day in October. This is intended to allow seaside operators to continue trading

to the end of the ‘summer season’ (which often extends slightly beyond the last day in October).

14. Correspondingly, the meaning of ‘winter period’ is amended so that it now covers the period beginning with the first Monday in November. This has been done to align the start date of the winter period with the new end date for seasonal licences.

15. These amendments to the period covered by seasonal licences will be effective for all seasonal licences granted for the summer season 2000 and future years.

16. Paragraph 9 makes provision for the recovery of amusement machine licence duty in relation to unlawfully unlicensed machines through the insertion of section 24A which introduces Schedule 4A ‘Unlicensed Amusement Machines’.

17. Paragraph 10(1) inserts Schedule 4A ‘Unlicensed Amusement Machines’

18. Sch4A paragraph 1 applies the provisions of the Schedule where it appears to the Commissioners that amusement machines are being or have been provided for play on premises in contravention of certain existing provisions in the Betting and Gaming Duties Act 1981.

19. Sch4A paragraph 2 makes provision for the Commissioners to issue a notice, to be known as a Default Notice, requesting the production of every amusement machine licence in force in relation to any amusement machine provided for play on the premises specified in the Default Notice during the period specified in the Default Notice. The premises specified in the Default Notice will be known as the "relevant premises" while the period covered by the Default Notice will be known as the "alleged default period". The first day of this alleged default period may not fall more than 3 years before the date on the Default Notice and the last day must fall on or before the date on the Default Notice. The Default Notice must specify a "due date" by which the requested licences must be produced.

20. A single Default Notice may relate to different relevant premises and different alleged default periods and will be deemed to have been given if it is left at or posted to the relevant premises or, given to, posted

to or left at the address of any person who appears to be now, or at any time during the alleged default period, a responsible person in relation to the relevant premises or any amusement machine provided for play on those premises, or any person who is the representative of any such person. The period of 3 years is extended in certain circumstances; see para 26 below.

21. Sch4A paragraph 3 makes provision for the Commissioners to grant a licence to be known as a ‘default licence’ in circumstances where the request made in a Default Notice is not complied with. Where there is a failure to produce a licence for any machines made available for play on the premises and during the period of time specified in the default notice these machines shall be known as ‘unlicensed machines’. The Commissioners may grant one or more default licences in respect of each ‘unlicensed machine’ for each period of consecutive days that the machine was unlicensed during the alleged default period.

22. Paragraph 3 additionally allows the Commissioners to grant a default licence for an unlicensed machine when it has been provided for play during the default period on premises other than those specified in the default notice. In such circumstances any reference to ‘relevant premises’ shall be taken to refer to those premises on which the machine was provided for play during the alleged default period.

23. The default licences referred to in paragraph 3 may exceed 12 months and need not refer to a period of complete months. The Commissioners may grant a default licence even though no application has been received .

24. Sch4A paragraph 4 makes provision for the Commissioners to assess, where a default licence is granted in relation to an unlicensed machine, to the best of their judgement the amount that would have been payable as amusement machine licence duty had the default licence been granted as an amusement machine licence under Schedule 4 of the Betting and Gaming Duties Act 1981. Any such assessment shall be based on the rates of amusement machine licence duty in force on the due date [see para 19 above]. If the period of the licence is 12 months or less the assessment shall be made as if an amusement machine licence had been granted for that period. If the period of the licence is more than 12 months the assessment shall be made as if a separate amusement machine licence had been granted for each 12 month period within the alleged default period and an additional licence had been granted for the

remainder of the period. If the period of the licence is less than a complete month or complete number of months it shall be treated as if it were for a complete month or complete number of months.

25. Sch 4A paragraph 5 provides that an amount assessed and notified to a responsible person or his representative shall be considered to be an amount of duty charged on an amusement machine licence. It provides that the amount shall be due from a responsible person and may be recovered accordingly unless the assessment is withdrawn or reduced.

This paragraph defines to whom the Commissioners may notify an assessment, the circumstances under which such an assessment shall be considered to have been notified, and the persons from whom such an amount may be recovered.

The paragraph provides that the payment of duty by instalment arrangements which may apply when an amusement machine licence is granted for a period of twelve months will not apply in relation to an amount assessed and notified.

26. Sch 4A paragraph 6 applies a one year time limit from the date specified in the default notice for the notification of an assessment. It provides for the three year retrospective limit on an alleged default period (on or before the date of a default notice) to be twenty years in certain circumstances.

It also makes decisions made by the Commissioners relating to the granting of a default licence, a person’s liability to pay an amount of duty contained in an assessment or a person’s liability as to an amount contained in an assessment subject to section 14 of the Finance Act 1994 (reviews of decisions).

27. Sch 4A paragraph 7 defines certain of the terms used in the Schedule.

28. Sch 4A paragraph 8 provides that a default licence may be granted in relation to an unlicensed machine without prejudice to any liability arising under section 24 (Restrictions on provision gaming machines) of the Betting and Gaming Duties Act 1981.

29. Paragraph 10(2) provides that Schedule 4A applies in relation to amusement machines which appear to have been provided for play on premises in contravention of section 21(1) or 24(3) or (4) of the Betting

and Gaming Duties Act 1981 on or after the day falling three years before the day on which the Finance Act 2000 is passed.

30. Schedule j6140 shows the legislation that has been repealed by the changes introduced in Schedule 2.

31. The cost of an amusement machine licence is determined by the period for which the licence is granted and the type of machine it is to cover. Licences can be granted to start on any day of the month and cover any full number of months from 1 to 12. These changes replace the current 3 categories of licenseable machines with 5 new categories and introduce a new table of rates which set out the cost for each length of licence for each machine category.

32. Seasonal licences are granted to traders who only operate through the ‘summer season’. The terms of these licences allow these machines to be used for 8 months, March to October, for the cost of a 6 month licence. The ‘summer season’ often extends beyond the last day of October because of,e.g., school half term holidays. To accomodate this the terms of these licences have been amended so that they now end on the Sunday before the first Monday in November.

33. The exclusion for ‘blank screen’ machines was originally intended to benefit a very simple type of machine, very few of which remain. The definition of video machines has been widely misinterpreted as exempting more sophisticated video machines from licence duty. The change to the definition of video machines has been made to remove any misunderstanding or doubt as to which video machines are liable to duty.

34. The changes to the rates of duty and definitions of machine categories will apply to all licence applications received after 4 August 2000.

35. The change to the definition of video machine will come into force when Royal Assent is granted.

36. The change to the end date for seasonal licences will be effective for all seasonal licences granted for the summer season this year.

37. Overall, these changes will be revenue neutral but the seaside arcades and not for profit clubs sector will benefit by up to £5 million

38. The measures relating to the recovery of amusement machine licence duty in relation to unlawfully unlicensed machines has been introduced to address a weakness in the existing legislation and is in line with a recommendation made by the National Audit Office. The changes will come into force when Royal Assent is granted.