Historically, it has always been possible to hold up to 15 of the same type of fundraising ‘events’ in a fiscal year and treat the income as exempt from VAT. This should not be confused with trading activities. However, the primary purpose for the event always had to be fundraising. Following an Upper Tribunal decision in January 2025, it has been accepted that there can be more than one primary purpose, (which must always be raising funds for holding the event) when holding a VAT exempt fundraising event. This means that eligible bodies could potentially treat their income from fundraising events, provided they are held to raise funds or serve a dual purpose including raising funds, as exempt from VAT.
The key Tribunal decision was for ‘The Yorkshire Agricultural Society charity’, who organises and runs the annual Great Yorkshire Show. They treated admission to the show in 2016 and 2017 as exempt from VAT on the basis it was a fundraising event and requested a refund on their VAT return for expenses incurred in holding the show. HMRC disagreed and raised an assessment for VAT due on admission income. HMRC were of the opinion that the primary purpose of the event was not fundraising and was not advertised clearly enough as one.
The existing legislation
Under Group 12, Schedule 9, VAT Act 1994 allows charities and other qualifying bodies to exempt supplies of goods and services which they make as part of an event held to raise funds for their charitable activities, providing that this is the primary purpose of the event.
HMRC’s view
‘Following the Upper Tribunal decision, HMRC’s policy remains that the primary purpose of the event must be that of fundraising and that the event must be advertised as a fundraising event.
However, where a charity or other qualifying body considers that an event is being held to raise funds and to promote another 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.’
In order to meet the exemption criteria, objective documentary evidence needs to be provided confirming the event was organised as a fundraising event, and not that there was simply an intention to obtain income from it. Whether fundraising was the primary reason for the organised event or one of the primary purposes and that the purposes are so interlinked that they cannot be separated in importance should also be considered.
Where you hold such events or have been thinking of holding an event of this nature and would like to discuss further.