Following the Upper Tribunal decision in Yorkshire Agricultural Society v HMRC [2025] UKUT 00004, HMRC have published 'Revenue & Customs Brief 3 (2025): VAT treatment of income received from charity fundraising events'.
The brief is aimed at charities and other qualifying bodies that raise money through fundraising events.
VAT legislation states that when an event is organised and promoted with the primary intention of raising funds for charity, the supply of goods and services for that event will be exempt from VAT.
The exemption applies to 'events' defined as a planned occasion with an outcome or a result. Regular or continuous activities such as operating a shop, do not meet the definition of an event. The Great Yorkshire Show, held annually, meets the definition of an event.
The Upper Tribunal (UT) decision in Yorkshire Agricultural Society v HMRC [2025] UKUT 0004 clarified that:
- The primary purpose of the event must be fundraising.
- There can be more than one primary purpose in certain circumstances.
- Where there is more than one primary purpose and these cannot be separated, the exemption can still be applied.
HMRC's stance remains that to obtain the exemption, the primary function of the event must be to raise funds and the event must be advertised as such. Where there is a possibility that more than one primary purpose exists, HMRC advise that:
- The charity or other qualifying body must provide evidence that more than one primary purpose exists.
- A clear explanation must be provided, clarifying why the two purposes cannot be separated.
- Objective documentary evidence must be provided to prove that the event was an organised fundraising event and not an event simply with the intention to obtain income from it.
HMRC reiterate that the fundraising event has to be considered out of the ordinary and not 'business as usual' to qualify for the exemption. However, the UT decision has not changed the limit of how many events of the same kind and in the same location can be held in any fiscal year. The limit remains at 15. Once the limit has been breached, all events are taxable.
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External link
Revenue & Customs Brief 3 (2025): VAT treatment of income received from charity fundraising events