Charity fundraising events – update

HMRC have published Revenue and Customs Brief 3 (2025) on the VAT treatment of income received from charity fundraising events.

VAT exemption

VAT exemption applies to the supply of goods and services by a charity or qualifying body in connection with an event where the primary purpose of the event is to raise money for charity and the event is promoted as being primarily for the raising of money. The brief follows the Upper Tribunal’s (UT) decision in the case of The Commissioners for HM Revenue and Customs vs Yorkshire Agricultural Society [2025] UKUT 4 (TCC). The UT confirmed that the primary purpose of an event must be fundraising, but that there can be more than one primary purpose, and where the purposes cannot be separated in importance, the requirement for the VAT exemption can still be satisfied.

VAT Tribunal; VAT penalty; VAT penalties; potential vat fraud

UK Law

The UT also held that UK law was incompatible with EU law in requiring an event to be promoted primarily for the raising of money, but that under the Marleasing principle the UK legislation could be interpreted to conform with EU law by deleting the word ‘primarily’. The brief states that, following the UT 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”.

To demonstrate that charity fundraising events is a primary purpose, there must be “objective documentary evidence” to support that the event was organised as a fundraising event. If a charity or qualifying body believes that their event has more than one primary purpose, they must be able to provide evidence and an explanation as to why the purposes cannot be separated in terms of their importance.

The brief advises that HMRC’s guidance on Charity fundraising events: exemptions will be updated in accordance with the brief.

Contact

More information from Solve VAT on the charities and not for profit sector or speak to us to discuss charity fundraising events or any other VAT matter on 0161 883 2120.