Registration requirements and fees
Are there any registration requirements, or any fees/taxes payable?
There are no requirements to register prize promotions.
The tax consequences must always be considered, in particular VAT and income tax/corporation tax and specialist advice should be sought. All will depend on the facts. Tripartite arrangements tend to be particularly complicated.
Generally, if publicity, advertising or some other form of consideration is received in return for incurring the cost of the prize, the promoter may deduct the cost of the prize for corporation tax purposes but must account for VAT on the supply of the prize and the promoter may claim input VAT on the cost of the prize.
If the prize is a true gift, the promoter only needs to account for VAT where the value of that prize exceeds £50 (approx. US$64) under the business gift rules but then will be entitled to claim input VAT on the cost of the prize. The promoter will not generally be able to claim a deduction for the cost of the prize for corporation tax purposes unless the promotion is open to the general public and the prize is one of the promoter's products.