UK Income Tax or Capital Gains Tax

Request

Official Powerball and Allwyn information describes the advertised UK Powerball jackpot as a “post-tax” figure, calculated using the “highest applicable UK tax rate”. This is unclear given that National Lottery winnings are not ordinarily subject to UK Income Tax or Capital Gains Tax in the hands of the winner.

Please provide the recorded information held by the Gambling Commission concerning the following:

1. What specific tax, tax rate, deduction or adjustment is referred to when the UK Powerball jackpot is described as being advertised “post-tax” and calculated using the “highest applicable UK tax rate”?
2. Which jurisdiction’s tax is being referred to (for example, UK or US taxation), and what is the statutory or contractual basis for applying that tax rate or equivalent adjustment when calculating the advertised UK jackpot?
3. Is an amount equivalent to this “tax” actually deducted from the UK winner’s underlying share of the international Powerball jackpot?
4. If an amount is actually deducted, please identify: a. who makes the deduction; b. who receives the deducted money; c. whether it is remitted to HMRC, the US Internal Revenue Service, another tax authority, MUSL, Allwyn, an annuity/investment provider, or another entity; and d. the legal or contractual basis on which it is deducted.
5. If no corresponding sum is actually paid to a tax authority, please provide the recorded information explaining why the UK advertised jackpot is nevertheless described as “post-tax”, and why the “highest applicable UK tax rate” is used to reduce or calculate the UK jackpot entitlement.
6. Please provide the formula or methodology used to convert a UK winning ticket’s share of the international Powerball jackpot/cash value into the advertised UK 30-year jackpot amount. I am not requesting commercially sensitive projections or internal business modelling where an exemption legitimately applies; I am requesting sufficient information to identify each deduction, adjustment or conversion applied and the destination, if any, of money removed from the winner’s underlying jackpot entitlement.
7. Please provide any recorded correspondence, guidance, licence documentation, regulatory assessment or other records held by the Gambling Commission which explain or approve the use of the terms “post-tax” and “highest applicable UK tax rate” in consumer-facing descriptions of UK Powerball jackpots.
8. Please confirm whether the Gambling Commission has assessed whether this presentation is consistent with the requirement for National Lottery information provided to consumers to be clear, fair and not misleading.

Response

In your email you have requested information regarding the calculation and presentation of UK National Lottery Powerball jackpots.

Official Powerball and Allwyn information describes the advertised UK Powerball jackpot as a “post-tax” figure, calculated using the “highest applicable UK tax rate”. This is unclear given that National Lottery winnings are not ordinarily subject to UK Income Tax or Capital Gains Tax in the hands of the winner.

Please provide the recorded information held by the Gambling Commission concerning the following:

1. What specific tax, tax rate, deduction or adjustment is referred to when the UK Powerball jackpot is described as being advertised “post-tax” and calculated using the “highest applicable UK tax rate”?
2. Which jurisdiction’s tax is being referred to (for example, UK or US taxation), and what is the statutory or contractual basis for applying that tax rate or equivalent adjustment when calculating the advertised UK jackpot?
3. Is an amount equivalent to this “tax” actually deducted from the UK winner’s underlying share of the international Powerball jackpot?
4. If an amount is actually deducted, please identify: a. who makes the deduction; b. who receives the deducted money; c. whether it is remitted to HMRC, the US Internal Revenue Service, another tax authority, MUSL, Allwyn, an annuity/investment provider, or another entity; and d. the legal or contractual basis on which it is deducted.
5. If no corresponding sum is actually paid to a tax authority, please provide the recorded information explaining why the UK advertised jackpot is nevertheless described as “post-tax”, and why the “highest applicable UK tax rate” is used to reduce or calculate the UK jackpot entitlement.
6. Please provide the formula or methodology used to convert a UK winning ticket’s share of the international Powerball jackpot/cash value into the advertised UK 30-year jackpot amount. I am not requesting commercially sensitive projections or internal business modelling where an exemption legitimately applies; I am requesting sufficient information to identify each deduction, adjustment or conversion applied and the destination, if any, of money removed from the winner’s underlying jackpot entitlement.
7. Please provide any recorded correspondence, guidance, licence documentation, regulatory assessment or other records held by the Gambling Commission which explain or approve the use of the terms “post-tax” and “highest applicable UK tax rate” in consumer-facing descriptions of UK Powerball jackpots.
8. Please confirm whether the Gambling Commission has assessed whether this presentation is consistent with the requirement for National Lottery information provided to consumers to be clear, fair and not misleading.

Our Response

The Gambling Commission can confirm that no information is held falling within the scope of your request. Please note, where the capital is used to purchase an annuity, the annuity payments received by the winner will consist of both capital, and interest earned on the capital. This is an established method and was not specifically addressed as part of the Powerball application, we therefore do not hold the documentation requested.

Review of the decision

If you are unhappy with the service you have received in relation to your Freedom of Information request you are entitled to an internal review of our decision. You should write to FOI Team, Gambling Commission, 4th floor, Victoria Square House, Victoria Square, Birmingham, B2 4BP or by reply to this email. 

Please note, internal review requests should be made within 40 working days of the initial response. Requests made outside this timeframe will not be processed.

If you are not content with the outcome of our review, you may then apply directly to the Information Commissioner (ICO) for a decision. Generally, the ICO cannot make a decision unless you have already exhausted the review procedure provided by the Gambling Commission. 

It should be noted that if you wish to raise a complaint with the ICO about the Commission’s handling of your request for information, then you are required to do so within six weeks of receiving your final response or last substantive contact with us.

The ICO can be contacted at: The Information Commissioner’s Office (opens in a new tab), Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.

Information Management Team
Gambling Commission