A new report by Ernst & Young for Bacta claims that the traditional seaside amusement arcades face the increased threat of closure under plans to introduce a new tax system for the industry.

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. The worst-hit businesses could have to shell out more than £1 million a year under the proposals.

The president of Bacta, Derek Petrie, commented: “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.”

About Bacta

BACTA was formed in 1974. With foundations laid in the late 19th Century, it now forms the largest Trade Association in the Gaming arena, and the only Association to represent the amusement industry in Great Britain. Currently it represents the interests of over 600 companies and over 1,000 individuals.