HMRC has published Revenue & Customs Brief 3 (2025), confirming the current interpretation of how VAT applies to income generated from goods and services sold at charity fundraising events.

This follows the Upper Tribunal decision in the Yorkshire Agricultural Society case, which ruled that events with dual primary purposes (e.g. fundraising and education) can still qualify for the fundraising VAT exemption when the elements cannot be separated in importance. 

The Tribunal also found that HMRC's requirement for events to be promoted primarily for raising money was too restrictive and inconsistent with EU VAT law. The Tribunal considered that whilst the event must still be promoted as being for a ‘fundraising’ purpose, the charity does not need to emphasise the word ‘primarily’ in its advertising (thus widening the scope for the application of exemption).

Who does this affect?

Charities and other qualifying bodies running fundraising events (such as festivals, dinners, sporting tournaments or agricultural shows) can potentially now benefit from wider access to this exemption. This applies, provided events are clearly fundraising in nature, run by or for the benefit of the charity, and don’t exceed 15 occurrences of the same type per venue each year

What are the opportunities?

Charities may be eligible to reclaim previously overdeclared output tax on event income (going back up to 4 years), which could potentially be significant sums (the Yorkshire Agricultural Society itself reclaimed approx. £200,000). Going forward, charities should review how they promote and structure events, ensuring promotional material highlights fundraising purposes for the main aims of the charity (even if the event has a dual purpose).

Next steps

It would be prudent for charities and qualifying bodies to review event income generated over the last 4 years, to consider if exemption could have been applied (it should be noted that exemption is mandatory when all the relevant conditions are met). Taxpayers should then prospectively consider whether the application of the fundraising exemption would provide a net income benefit, or whether structuring events as non-fundraising events improves the net VAT position (given the potential entitlement to recover VAT on associated costs such as venue hire and catering if exemption does not apply).

If you need help reviewing eligibility or to quantify/prepare a claim for overdeclared output tax, please get in touch.