Play Meter

UPDATE EDITION
Vol. 5, No. 14
August 1, 1979
B·ritish tax ''disastrous''
Michael Shefras, vice president of
the British Amusement Catering
Trades Association , summed it all up
with one word: "Disastrous."
The latest problem for operators in
the United Kingdom is another tax
burden. In a country where taxation
is habitually unrealistic , operators of
coin-operated amusement and gam-
bling devices have been stunned by a
colossal seven percent rise in the
Value Added Tax, a gross earnings
tax which now allows the English
government to demand fifteen per-
cent right off the top of operators
revenues .
According to Alan Willis , general
secretary of the British Amusement
association, the tax is designed to be ·
passed on to the operators' clients.
"The tenants are going to have to
pay the increase as far as single-sites
are concerned ," Willis told Coin Slot ,
the British trade magazine.
"The effect ," he further explained ,
"is to reduce the earnings of the
industry. In a limited number of
instances it will be possible to recoup
some of the V. A. T. by adjusting the
percentages of payout machines, but
only in a very small number. In the
vast majority of cases it is not possible
because the machines are not made
that way ."
The real hammer blow of the
additional tax fell on arcade owners
who have no way of passing on the
tax costs . The increase in the V.A.T.
is translating into an extra seven
percent straight off the top of their
profits with no means of recouping it.
In the already overly burdened
jukebox sector of the industry, the
Value Added Tax is being looked at
as the final eliminator: "What we are
saying ," expresses Coin Slot , "is that
if the terms remain the same , then
the increase in V .A. T. effectively
wipes out either fifty percent or one
hundred percent of the operator's
profits . The increase in V .A .T .
therefore practically wipes out the
jukebox industry's profitability ."
Meanwhile, in an effort to deal
with the stunning blow , the British
Association called a series of meet-
ings to discuss the tax increase with
industry representatives.
First, the single-site operators met;
the prevailing climate was one of
distress at the implications of the
V.A.T., combined with a determina-
tion to take aggressive action.
Manufacturers , distributors, and ar-
cade owners then conducted meet-
ings and similar stormy responses
were evident everywhere.
The "action" will not center
around removing or reducing the
tax , as Willis stated: "That is a waste
of time . What we have to do is find
ways that are acceptable both to the
trade and to the Government of
easing the effect in other directions."
He said that the Association has
already produced a package of
proposals covering "every facet of
the business that is affected, " and
that a telegram had been sent to the
Minister of State , Treasury , pointing
out that the increase in the V.A.T. is
a turnover tax on the trade and that
there is no way of passing it on to the
customer.
Being as the arcade owner is most
confined by the tax - completely
lacking alternatives for passing on .the
tax - the Association is attempting to
secure the rights for operation of .two
and five pence machines. Such
allowances, the Association con-
tends , would bring relief to the
seaside arcade .
CALENDAR
August 16-19
Music Operators of Michigan, Boyne
Mt. Lodge, Boyne Falls
October 25-28
NAMA national convention , McCor-
mick Place , Chicago
September 15-16
North Carolina Coin Operators
Association , Sheraton Center , Char-
lotte
November 9-11
AMOA international exposition ,
Conrad Hilton Hotel , Chicago
October 5-6
Amusement & Music Operators of
Virginia , John Marshall Hotel , Rich-
mond
January 18-20
Oregon Amusement & Music Ope-
rators Association , Valley River Inn ,
Eugene
October 11-13
West Virginia Music & Vending
Association , Ramada Inn , South
Charleston
January 18-20
Music Operators of Minnesota, Min-
neapolis
October 14
Deutsche Wurlitzer Distributors Meet-
ing, Hotel Croatia , Dubrovnik , Yu-
goslavia
June 5-7
Music Operators of Texas , Flagship
Hotel , Galveston