Bit random but I didn’t know where to post to get an answer. I was watching TV last night when an advert came up for a phone-in competition in which you could win £20,000 tax-free cash. How is that cash tax-free? What do the competiotion hosts do to get that money tax-free?
In: 14
All gambling companies pay a special tax which varies depending on the type of gambling:
[https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/betting-gaming-duties/](https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/betting-gaming-duties/)
[https://www.gov.uk/topic/business-tax/gambling-duties](https://www.gov.uk/topic/business-tax/gambling-duties)
I think your example comes under Lottery Gaming:
[https://www.gov.uk/guidance/lottery-duty](https://www.gov.uk/guidance/lottery-duty)
in which case the competition host company will pay 12% of all revenue received (note: revenue, ie: the total amount paid in stakes) by people entering.
So we effectively tax on stakes paid rather than winnings received.
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