Policy paper

VAT treatment of income received from charity fundraising events

Published 13 June 2025

Purpose of this brief

This brief gives an update on the VAT treatment of supplies made by charities and other qualifying bodies in connection with fundraising events. This follows the Upper Tribunal decision in Yorkshire Agricultural Society ([2025] UKUT 00004) handed down on 9 January 2025.

Who needs to read this

Charities and other qualifying bodies who plan to raise money through fundraising events.

Background

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. Not all fundraising events will qualify for exemption as this could give charities and other qualifying bodies an unfair advantage over commercial providers.

The law sets out that an event is something that is clearly organised and promoted primarily to raise money for the benefit of the charity or qualifying body. Events which are not organised to raise funds, but which incidentally make a profit do not fall within the exemption. People attending or participating in the event must be aware of its primary fundraising purpose.

An ‘event’ is a planned occasion with an outcome or a result. This means that activities of a semi-regular or continuous nature, such as the frequent operation of a shop or bar, cannot therefore be an event. The relief is not intended to exempt normal trading activities from VAT.

The recent Upper Tribunal decision in Yorkshire Agricultural Society clarified which events will qualify for the exemption.

The Upper Tribunal decision

The Upper Tribunal found in favour of Yorkshire Agricultural Society, and HMRC has not appealed the decision. There were 2 strands to the Upper Tribunal’s decision.

The primary purpose of the event

The Upper Tribunal confirmed that the primary purpose of the event must be that of fundraising.

However, the court 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 circumstances, there may be two primary purposes. Where these cannot be separated in importance, the exemption can still apply provided one of those primary purposes is fundraising.

Promotion of the event

The law says that the event must be ‘promoted as being primarily for the raising of money’. The Upper Tribunal found this to be incompatible with the European legislation. However, using the ‘Marleasing’ principle, domestic legislation can be interpreted to conform with the relevant EU provisions where there is some inconsistency between the 2. Using this approach, the Upper Tribunal found that the word ‘primarily’ should be ignored. This means that the event must still be promoted as a fundraising one but does not need to emphasise this as a primary purpose.

HMRC’s position following the decision

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.

If a charity or other qualifying body considers 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.

Events which are not organised to raise funds, but which incidentally make a profit do not fall within the exemption and the Upper Tribunal has agreed with this interpretation.

To demonstrate a primary purpose, charities and 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.

It should be reiterated that a fundraising event is considered to be something out of the ordinary, and not business as usual. Although annual events such as the one concerned in this case can fall within the exemption, semi-regular or continuous activity, including trading activity, are less likely to be an ‘event’ for the purposes of the relief.

The event must be promoted as being for the purpose of fundraising.

Other clauses in the relief

There is no change to the limit of how many events of the same kind and in the same location can be held in any fiscal year. This remains at 15. If 16 or more such events are held, all such events become taxable — you cannot exempt 15 events and then treat the 16th as taxable.

Also, there is no change to the anti-competition clause in the legislation. This restriction prevents distortion of competition with other suppliers of similar events which do not benefit from tax exemption. This applies where the relief is likely to distort the market, and where there is significant and systematic evidence of commercial distortion.

More information

For more information on the VAT liability of income received from fundraising events please see the guidance Fundraising events — exemption for charities and other qualifying bodies. This guidance will be updated to reflect HMRC’s position as set out in this brief.