Charities ― fund-raising events

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Charities ― fund-raising events
  • Charities and qualifying bodies
  • Exempt fund-raising events
  • Income covered by the fund-raising exemption
  • Zero-rated supplies and the fund-raising exemption
  • Income from non-qualifying fund-raising events
  • Charity challenge and sponsored events

This guidance note provides an overview of the VAT treatment of fund-raising events and, in particular, the exemption for fund-raising events that applies to certain charities and ‘qualifying bodies’. This note should be read in conjunction with the Charities ― overview and Charities ― recovering VAT and VAT reliefs guidance notes.

VATA 1994, Sch 9 Group 12; De Voil Indirect Tax Service V4.171 (subscription sensitive); Council Directive 2006/112/EC, art 132(1)(o) (subscription sensitive)

Key HMRC guidance on fund-raising can be found in Notice VCHAR9000 and Notice 701/1 . Further fund-raising guidance is also available on the GOV.UK website .

Charities and qualifying bodies

The VAT legislation limits the exemption for fund-raising events to supplies made by charities and ‘qualifying bodies’.

VATA 1994, Sch 9, Group 12
Charities and their trading subsidiaries

For the meaning of charity in the context of this exemption, see the Charities ― overview guidance note.

For the purposes of the fund-raising exemption, relief also extends to a charity’s trading subsidiary provided:

  • it is wholly owned by the charity
  • it has either agreed in writing (whether or not contained in deed) to transfer its profits (from whatever source) to the charity or its profits (from whatever source) are otherwise payable to the charity

VATA 1994, Sch 9, Group 13, Note 2

Therefore, normally, if a charity’s trading subsidiary can retain its profits then it will not be able to exempt any fund raising activities that it holds. However, HMRC has stated that it will accept that exemption may apply, where:

  • the arrangements are compatible with charity law
  • profits are paid to the

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