Hi
How should we treat MDG transactions in the accounts?
From what I understand, gaming income with its respective tax should be treated separately from the normal trading income. This is because thre gaming net income should not be included in the final accounts for HMRC Tax Returns otherwise it would be double taxed right?
So how do we record the bank payments of MGD, in order to credit the bank but not count as an expense?
Many Thanks
Replies (8)
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you don't pay VAT on machine income however,you do pay tax.
The MGD is shown as a liability on the balance sheet.
Debit: MGD liability
Credit: Bank
An example total receipts £100
Machine income P&l £80.00 (credit)
MGD Liability BS £20.00(credit)
Bank BS £100.00 (debit)
Then just reverse the MGD liability when you pay the duty as above.
Duties are a separate form of taxation they do not replace income tax or corporation tax. You may of heard of others:
Fuel Duty
Alcohol Duty
Import Duty