When hosting a raffle on Raffall, it is important to understand how VAT (Value Added Tax) might apply to the payment you receive. This guide explains the key points regarding VAT and your responsibilities as a host.
Understanding Payments on Raffall
Raffall processes all payments from entrants, meaning hosts never receive payments directly from participants. Instead, the host receives a single payment from Raffall once the raffle is complete and the prize has been confirmed as delivered.
Effectively, this means the host is selling their prize to Raffall, and it is the host’s responsibility to determine whether VAT applies to this transaction.
Does VAT Apply to My Raffle Proceeds?
Whether VAT applies depends on the circumstances surrounding the withdrawal of your proceeds. Here are the key scenarios:
1. Proceeds Withdrawn to a Personal Bank Account
If you withdraw the proceeds to a personal bank account, VAT does not apply. The payment you receive from Raffall is treated as a private sale, and no VAT will be included in the amount.
2. Proceeds Withdrawn to a Business Bank Account (UK-Based VAT-Registered Business)
If you withdraw proceeds to a business bank account and your business is VAT registered in the UK, the payment from Raffall will include an element of VAT. In this case:
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The host (you) is responsible for accounting for VAT on the payment.
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It is your responsibility to charge VAT as the seller of the prize.
3. Proceeds Withdrawn to a VAT-Registered Business Outside the UK
For VAT-registered businesses located outside the UK, no VAT will be included in the payment. This is due to international VAT rules governing cross-border transactions. However, you may need to account for VAT according to the rules in your country.
Your Responsibilities as a Host
As a host on Raffall, you are responsible for:
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Determining whether VAT applies to the proceeds you receive from Raffall.
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Accounting for and reporting VAT if your business is VAT registered and located in the UK.
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Understanding the VAT rules in your jurisdiction if your business is located outside the UK.
Key Takeaways
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Raffall’s payment to the host is considered the purchase of the prize by Raffall.
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VAT is the responsibility of the host and depends on the account type used for withdrawal and the host’s VAT registration status.
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Hosts withdrawing proceeds to personal accounts do not need to account for VAT.
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UK-based VAT-registered businesses must include VAT in the payment received.
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Businesses outside the UK may be exempt from VAT but should verify local regulations.
If you are unsure about your VAT obligations, we recommend consulting a tax professional or accountant to ensure compliance with applicable laws.