»Ê¹ÚÌåÓýapp

Law

VAT exemption applies to supplies of goods and services made by by charities and other qualifying bodies during certain fundraising events. »Ê¹ÚÌåÓýapp law relating to this is in Group 12 to Schedule 9 of VAT Act 1994.

»Ê¹ÚÌåÓýapp exemption covers supplies made by the charity or other qualifying body running the fundraising event. It does not exempt supplies made to that charity or qualifying body by organisations or other charities. This means that the charity or qualifyijg body running the exempt fund-raising event will invariably incur non-recoverable input tax.

Comprehensive guidance on fund-raising events can be found in Fundraising events: exemption for charities and other qualifying bodies.

What is a qualifying body?

Certain qualifying bodies may also take advantage of the exemption for fund-raising events. A qualifying body is:

• Any non-profit making organisation that is a membership organisation within Group 9 to Schedule 9 of VAT Act 1994.
• Any body that is an eligible body for the purposes of Group 10 to Schedule 9 of VAT Act 1994 and whose principal purpose is the provision of facilities for persons to take part in sports or physical education.
• Any body that is an eligible body under the cultural exemption provisions in Item 2 to Group 13 of Schedule 9 of VAT Act 1994.

»Ê¹ÚÌåÓýapprefore, whether or not they are a charity, if an organisation falls under the eligibility for one of the above bodies, they may organise an exempt fund-raising event under the provisions of Group 12 to Schedule 9, providing all the conditions are met.

Please note: Whilst Community Amateur Sports Clubs (CASC) are not charities, and therefore do not qualify for any of the specific charity VAT reliefs, under the second bullet point above, they may qualify for the fundraising exemption, providing all the conditions are met.

What constitutes a fund-raising event?

Following the Upper Tribunal (UT) decision in Yorkshire Agricultural Society ([2025] UKUT 00004), which was handed down on 9 January 2025, this guidance has been modified to reflect HMRC's new position.

»Ê¹ÚÌåÓýappre are two main criteria that must be met:

• »Ê¹ÚÌåÓýapp event must be organised by a charity (or qualifying body). Sometimes this will be obvious from the advertising literature, but at other times you may need to consider this carefully. »Ê¹ÚÌåÓýapp main question to ask is “who has financial responsibility?â€� For example, where an event requires at least 500 tickets to be sold in order to break even, who is responsible for covering any losses made if less than 500 tickets are sold? We would expect the responsibility to lie with the charity (or qualifying body) organising the event.

“Some events, such as a film premiere or gala, may be advertised as raising funds for charity. You will need to check carefully whether it is a charity organising the event, as it is more likely that the event is organised by a corporate body which is donating the proceeds of the event to a charity.�

• »Ê¹ÚÌåÓýapp primary purpose of the event must be to raise money. »Ê¹ÚÌåÓýapp main and overriding purpose of holding the event should be to raise funds. However, in the aforementioned UT decision, it was determined that where the law says that "an event whose primary purpose is the raising of money", there can be more than one primary purpose, As such, the 'fundraising' primary purpose can be "a primary purpose" and not only "the primary purpose". This widens the scope of the relief to accept that, in certain cirucumstances, there may be two primary purposes, and where these cannot be separated in importance, the exemption can still apply, provided one of those primary purposes is fundraising

To demonstrate a primary purpose, charities or other qualifying bodies must be able to provide objective documentary evidence that the event was organised as a fundraising event, and not that there was simply an intention to obtain income from the event. »Ê¹ÚÌåÓýapprefore, you may need to review the objective documentary evidence to confirm that the main reason for holding the event was to raise funds.

»Ê¹ÚÌåÓýapp law says that the event must be “promoted as being primarily for the raising of moneyâ€�. However, the UT found this to be incompatible with the European legislation, and using the ‘Marleasingâ€� principle, which allows for domestic legislation to be interpreted to conform with the relevant EU provisions, where there is some inconsistency between the two, they determined that the word “primarilyâ€� should be ignored. This means that the event must still be promoted as a fundraiser but does not need to emphasise this as a primary purpose.

»Ê¹ÚÌåÓýapprefore, following the UT decision, HMRC’s position remains that the primary purpose of an event must be that of fundraising, and that the event must be advertised as a fundraising event. If a charity believes that an event has more than one primary purpose, they must be able to evidence this and provide a clear explanation as to why they cannot be separated in terms of importance.

Fundraising events are considered to be occurrences that are out of the ordinary, and not business as usual. Events which are not organised to raise funds, but which incidentally make a profit, do not meet the “primary purpose� condition, and cannot be exempted..

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Internet fund-raising

Fundraising events held over the Internet, for a specific time period, that meet the other conditions of the fundraising exemption can be treated as exempt from VAT. A charity’s entire website is treated as a location.

Fundraising over the internet often takes the form of an auction. »Ê¹ÚÌåÓýappse usually take place over a number of days and may include a variety of items (or lots) for sale. This can be a single event if:

• there is a specified closing date
• bidding closes at this date
• goods are not sold before the closing date. When these conditions are not met, the sale of each item (or lot) would be a separate event,

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  Fund-raising events held in association with other events

  Sometimes a charity or other qualifying body may be able to organise an exempt fundraising event in association with a different event (which may or may not be an exempt fundraising event in its own right). An example might be a national sporting event where the charity plans to have a marquee and hold an auction of sporting memorabilia. In this scenario, the charity can use the fundraising exemption in respect of its auction as long as all the other conditions of the fundraising exemption have been met.