Yorkshire Agricultural Society Case Leads to New HMRC Guidance on Charity Fundraising Events

Revenue and Customs Brief 3 2025: What Charities Need to Know About VAT on Fundraising Events

The recent publication of Revenue and Customs Brief 3 2025 marks a significant development in VAT treatment for charity fundraising events, directly stemming from the Yorkshire Agricultural Society case.

This guidance provides much-needed clarity for charities and organisations running fundraising activities.

Background: The Yorkshire Agricultural Society Case

The Yorkshire Agricultural Society case highlighted complex VAT issues surrounding charity fundraising events. The case examined whether income from certain fundraising activities should be subject to VAT, creating uncertainty across the charity sector about their VAT obligations.

What Does Revenue and Customs Brief 3 2025 Cover?

• The new brief addresses several key areas:
• Fundraising Event Classification: Clear guidance on when fundraising activities constitute taxable or exempt supplies
• VAT Treatment: Specific rules for different types of charity fundraising events
• Primary or Secondary Purpose: Updated guidance on how to treat events that have more than one purpose.
• Advertisement: Guidance on how the event is promoted and advertised can affect the VAT treatment.
• Practical Application: Real-world scenarios to help charities assess their VAT position

Key Implications for Charities

Charites should beware of the implications the updated guidance can have on their event

• Fundraising remains the essential purpose: To benefit from the VAT exemption, the event must be organised primarily to raise funds. Dual-purpose events can still qualify, but fundraising must be a main aim, not incidental.
• Promotion must reflect the fundraising purpose: Advertising and publicity must explicitly state that the event is for fundraising.
• Routine activities remain excluded: Events that form part of a charity’s regular business activity (e.g. running a bar, permanent trading) are not exempt.
• Watch the 15-event rule: If a charity holds more than 15 similar events in the same location within a 12-month period, VAT exemption is lost for all such events.

What Should Charities Do Now?

• Review Current Practices: Assess existing fundraising activities against the new guidance
• Evaluate VAT Registration: Consider whether turnover thresholds may be affected
• Update Procedures: Ensure accounting and administrative processes reflect the guidance
• Seek Professional Advice: Complex cases may require specialist VAT consultation
  

Looking Forward

This brief represents HMRC’s commitment to providing clearer guidance following significant case law. Charities should view this as an opportunity to ensure compliance whilst maximising their fundraising potential.

The Yorkshire Agricultural Society case and subsequent guidance demonstrate the importance of understanding VAT implications in charity operations. Proper planning and compliance can help charities reduce their VAT bill whilst continuing their valuable work.

Need Expert VAT Advice?

Navigating charity VAT can be complex. Our specialist team at Deeks VAT Consultancy provides expert guidance on all aspects of VAT for charities and fundraising organisations.

Contact Jane Deeks at Deeks VAT Consultancy for professional advice across all industries. 

jane@deeksvat.co.uk | 07710553831 | LinkedIn