Omaze in court over tax dispute on luxury house prize draws

Luxury house prize draw platform Omaze has appealed against HMRC over whether paid entries in its prize draws are subject to standard-rate VAT. Omaze lists itself on its website as not a charity raffle, house or cash raffle or house or cash lottery but a prize draw . An organisation that offers a free entry route to a draw, such as a postcard option, avoids being regulated as a lottery under the Gambling Act, and HMRC categorises the service as a prize draw, meaning its paid entries do not qualify for the VAT exemption that regulated lotteries receive. However, earlier this year, Labour MP Dan Tomlinson, who was responsible for HMRC and tax policy until July, confirmed that prize draws offering both paid and free entry routes are not eligible for VAT exemption and paid entries will be subject to VAT at the standard rate of 20 per cent. This landmark dispute went to the First Tier Tax Tribunal, which heard the appeal on Friday, with a decision expected in Spring next ye