Charities ― fundraising events

By Tolley
Charities ― fundraising events

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

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

This guidance note provides an overview of the VAT treatment of fundraising events and, in particular, the exemption for fundraising 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; Council Directive 2006/112/EC, art 132(1)(o)

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

Charities and qualifying bodies

The VAT legislation limits the exemption for fundraising 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 fundraising 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 fundraising 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 charity
  • the only profit retained annually by the subsidiary is not subject to corporation tax


More on Charities: