HMRC applies 20% VAT to paid UK prize-draw entries
HM Revenue and Customs has taken the view that paid entries to prize draws run by businesses covered by the government’s voluntary code are subject to the standard 20% VAT rate. Tax advisers questioned whether current legislation supports that interpretation, while some operators fear reduced margins and possible retrospective claims.
The tax treatment could change prize-draw operators’ costs and expose them to potential claims for earlier periods.