Charity Fundraising Events: New VAT Clarification You Need to Know

If your organisation is a charity — or you support charities by helping run events — a recent case at the Upper Tribunal has brought clarity to the VAT rules surrounding fundraising events.

HMRC has now issued updated guidance (Revenue & Customs Brief 3: VAT treatment of income received from charity fundraising events), and it’s crucial to understand how this affects exemptions and VAT liabilities going forward.

🎪 What Counts as a Fundraising “Event”?

To be eligible for VAT exemption, an “event” must be:

• Clearly organised and promoted to raise money for charitable purposes.
• A planned occasion with a defined outcome (e.g. a concert, auction, fun run, or ticketed dinner).
• Not a regular commercial activity, such as a permanent café, shop, or ongoing service.

Crucially, even if the event does not raise a profit, it can still qualify as VAT-exempt — as long as it was promoted and organised as a fundraising event.

🎯 The Primary Purpose Rule

A key takeaway from the ruling is that:

“The primary purpose of the event must be that of fundraising.”

However, HMRC clarified that fundraising can be “a” primary purpose, not necessarily the only purpose.

Why this matters:

Some charity events may have multiple objectives — e.g. raising awareness, recruiting volunteers, or celebrating achievements — but as long as fundraising is a main component, VAT exemption may still apply.

📣 Promotion Is Key

The law requires that:

• The event must be promoted as being primarily for fundraising.
• The word “primarily” was ruled by the Tribunal as not essential, but the event still needs to clearly emphasise its fundraising purpose.

In other words: your charity doesn’t need to say “this is primarily for fundraising”, but the materials and messaging should make that purpose obvious.

🧾 HMRC’s Updated Stance

Following the ruling, HMRC’s guidance now confirms:

• If an event has more than one purpose, charities must be able to prove:

  1. Evidence of the fundraising objective (e.g. tickets, posters, documentation).

  2. A clear explanation of how the fundraising element cannot be separated in importance from other goals.

Charities must keep in mind:

• The same event type can only qualify for VAT exemption up to 15 times in a financial year.

• If you exceed that, VAT must be charged on further events of that type.

⚠️ Penalty Risk for Getting It Wrong

Events that don’t meet the fundraising definition — or where documentation is missing — may lose VAT exemption.

That can result in:

• Backdated VAT charges on income.
• Interest and penalties for non-compliance.

✅ Merranti’s Advice

Whether you’re a registered charity or a business supporting fundraising efforts, you should:

• Review your event planning processes to ensure fundraising is clearly documented and promoted.

• Keep evidence such as event flyers, email campaigns, and trustee meeting notes showing fundraising intent.

• Count how many similar events are being held to avoid breaching the 15-event rule.

📨 If you’re involved in running, advising, or accounting for a charity, don’t take VAT exemption for granted. Getting this wrong can be costly.

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Alternatively, you can get in touch to confirm your event qualifies before the invoice is sent.