VAT Update: What Charities Need to Know About Fundraising Events in 2025

Imagine this…

You are planning a summer gala to raise funds for your charity’s new outreach programme. You have secured a venue, lined up entertainment, and started selling tickets. But then a question arises: Will this event be VAT exempt? You search online, ask around, and realise the rules are not as clear as you hoped.

If this sounds familiar, you are not alone. Many charities are unsure how HMRC’s VAT rules apply to fundraising events, especially after a recent legal update.

What you need to know

Until recently, the VAT exemption for charity fundraising events was widely misunderstood. Some charities assumed that any event that raises money qualifies. Others believed that as long as the event supports a charitable cause, it is automatically exempt.

However, following a January 2025 Upper Tribunal decision, HMRC has clarified its position and it is more complex than many expected.

Here is the key issue: Not all fundraising events are VAT exempt, even if they generate income for a charity. If your event is not primarily organised and promoted as a fundraiser, it may fall outside the exemption rules.

What Counts as a Fundraising Event?

• The event must be organised primarily to raise money for your charity or qualifying body.
• It must be promoted as a fundraising event and this should be clear in your marketing, tickets, and communications.
• Events should be out of the ordinary, not part of your regular operations (e.g. not a weekly café or permanent shop).

A point to note here is that you can only hold up to 15 similar events per location per financial year.

What Does Not Qualify?

• Events that incidentally raise money but are not promoted as fundraisers.
• Activities that resemble ongoing commercial operations, such as running a bar or shop.
• Events that distort competition with commercial suppliers as HMRC’s anti-competition clause still applies.

Ask the Expert: What if My Event Has Multiple Purposes?

The Upper Tribunal confirmed that an event can have more than one primary purpose, but fundraising must be the main focus and clearly promoted. If your event also aims to raise awareness or build community, that is fine as long as fundraising remains the core focus.

What to Do Next

If you are planning a fundraising event this year, now is the time to review your VAT position. Our specialists are here to help you navigate this complex matter.

 Speak to our team today to book a VAT review or explore our charity advisory services.