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 Revenue and Customs brief follows the Upper Tier 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 as set out by the European Court of Justice 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.

HMRC also maintain that:

A maximum of 15 events of a similar nature in the same location can benefit from exemption per fiscal year. If 16 or more such events are held, all such events become taxable as it is not possible to exempt 15 events and then treat the 16th event as taxable.
The existing anti-competition clause remains. This restriction prevents distortion of competition with other suppliers of similar events which do not benefit from tax exemption.

Charity organisers can now plan events more flexibly, knowing that having more than one principal aim no longer invalidates VAT relief, provided fundraising remains one of them.

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.