- The UK prize draw market is worth £1.3 billion annually, with 7.4 million adult participants and over 400 operators.
- A recent parliamentary question challenged how VAT applies to ticket sales for online prize draws with both paid and free entry routes.
- HMRC confirmed that paid entries in such prize draws are subject to VAT at the standard 20% rate and are not exempt.
- Experts note ongoing uncertainty and potential for litigation over HMRC’s position, given the complexity and financial stakes.
- A new voluntary code of conduct for prize draw operators will take full effect from 20 May 2026, aiming to improve consumer protection and industry transparency.
Source: pinsentmasons.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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