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VAT treatment of income received from charity fundraising events

Chris Dears, Director, VAT, Customs and International Trade
23/06/2025
Three people working on post it notes
HMRC has released its Revenue and Customs Brief 3 (2025) which covers its reaction to its defeat in the Upper Tier Tribunal involving the Yorkshire Agricultural Society.

Please see our previous alert on VAT ruling broadens the scope for fundraising event exemptions.

Who does this concern?

All charities and non profit bodies who could potentially apply the fundraising exemption for charged events.

Why is this important?

In UK VAT law, fundraising events are only seen as VAT exempt if they have a primary purpose of fundraising and are clearly held out as such. In many instances these conditions are clearly met but, in this case the event had more than one purpose. HMRC has intimated that ‘primary purpose’ equates to ‘sole purpose’ and this argument seemed to succeed in a previous Upper Tier decision in Loughborough Students Union and others.

However, in this latest case which sets a legal precedent, it was determined that:

  • there can be more than one primary purpose
  • as also in the Loughborough case, the event did not need to be held out as a fundraiser for exemption to potentially apply.

HMRC responses in this latest brief

  • HMRC accepts that there can be more than one primary purpose, but taxpayers need to evidence that these purposes have equal weighting.
  • HMRC also accepts that whilst events still need to be held out as fundraisers, they are not required to be shown that they are ‘primarily’ fundraisers.
  • HMRC also suggests that annual events (such as the one the Society holds) can qualify but semi-regular and similar events (not of a one-off nature) cannot.

What does this mean?

It seems HMRC are seeking to limit the effect of the court decision. In our view, we are unsure how several primary purposes cannot automatically be seen as having equal weighting. Also, we are not certain whether an event needs to be held out as a fundraiser at all (but the safe option is to do so). Furthermore, we cannot see how an annual event is not at least semi-regular in nature. Perhaps more litigation will ensue.

Next steps

Review your events subject to VAT where fundraising is a key aim from the outset, but the events have other key aims. It may be possible to recover any VAT overpaid on this basis going back four years.

For further guidance, please contact Rob Warne or your usual Crowe contact.