1.1 What this notice is about
This notice explains how VAT applies if you give or receive sponsorship. A new section on crowdfunding has been added.
This notice only deals with VAT. See Charities and tax for information on other taxes and Gift Aid.
A person who gets sponsorship will normally be making a supply to the sponsor. This means that even if the other taxable supplies you make would otherwise be below the VAT registration limits, you may become liable to register because of your sponsorship income. If you are not already registered for VAT you should read Notice 700/1 'Should I be registered for VAT'. You may also be making taxable supplies if you're a sponsor giving sponsorship in the form of goods or services rather than by payment of a sum of money.
1.2 Definition of sponsorship
Sponsorship is a payment to a charity, social project or a business for which the sponsor receives something in return. Payment may be in the form of money, goods and services (commonly referred to as 'barter'), or a combination of money with goods and services.
Sponsorship is a common feature of artistic, sporting, educational and charitable activities, but it is not restricted to these areas.
The payments may also be described as something else, for example, as a donation. Sponsorship is similar to a donation in that persons sponsoring a charity or social project are usually motivated by a wish to support it. But where the sponsor also receives something in return, this may